When Will The Beauty Health Company (NASDAQ:SKIN) Become Profitable?

The Beauty Health Company (NASDAQ:SKIN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. The Beauty Health Company designs, develops, manufactures, markets, and sells aesthetic technologies and products worldwide. The company’s loss has recently broadened since it announced a US$30m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$366m, moving it further away from breakeven. As path to profitability is the topic on Beauty Health’s investors mind, we’ve decided to gauge market sentiment. We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Beauty Health

According to the 8 industry analysts covering Beauty Health, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$5.3m in 2022. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 86% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:SKIN Earnings Per Share Growth December 24th 2021

We’re not going to go through company-specific developments for Beauty Health given that this is a high-level summary, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Beauty Health currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Beauty Health which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Beauty Health, take a look at Beauty Health’s company page on Simply Wall St. We’ve also compiled a list of pertinent aspects you should look at:

  1. Valuation: What is Beauty Health worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Beauty Health is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Beauty Health’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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