ALK-Abelló A/S’s (CPH:ALK B): ALK-Abelló A/S, a pharmaceutical company, develops and markets products and services for allergy and allergic asthma in Europe, North America, and internationally. The ø21b market-cap company announced a latest loss of -ø50.0m on 31 December 2019 for its most recent financial year result. The most pressing concern for investors is ALK B’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for ALK B.
According to the 4 industry analysts covering ALK B, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of ø206m in 2021. ALK B is therefore projected to breakeven around a few months from now. How fast will ALK B have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 52% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ALK B may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of ALK B’s upcoming projects, however, take into account that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. ALK B has managed its capital judiciously, with debt making up 23% of equity. This means that ALK B has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of ALK B to cover in one brief article, but the key fundamentals for the company can all be found in one place – ALK B’s company page on Simply Wall St. I’ve also compiled a list of key factors you should look at:
- Valuation: What is ALK B 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 ALK B is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ALK-Abelló’s board and the CEO’s back ground.
- 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.
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