Spark Therapeutics Inc’s (NASDAQ:ONCE): Spark Therapeutics, Inc. focuses on the development of gene therapy products for patients suffering from debilitating genetic diseases. The US$2.86b market-cap posted a loss in its most recent financial year of -US$253.48m and a latest trailing-twelve-month loss of -US$247.57m shrinking the gap between loss and breakeven. Many investors are wondering the rate at which ONCE will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for ONCE, its year of breakeven and its implied growth rate.View out our latest analysis for Spark Therapeutics
According to the industry analysts covering ONCE, breakeven is near. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . ONCE is therefore projected to breakeven around a couple of months from now! What rate will ONCE have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 22.86%, which signals high confidence from analysts. If this rate turns out to be too aggressive, ONCE may become profitable much later than analysts predict.
Underlying developments driving ONCE’s growth isn’t the focus of this broad overview, though, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that ONCE has managed its capital judiciously, with debt making up 7.45% of equity. This means that ONCE has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on ONCE, so if you are interested in understanding the company at a deeper level, take a look at ONCE’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should look at:
- Historical Track Record: What has ONCE’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Spark Therapeutics’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.