Ardelyx, Inc.'s (NASDAQ:ARDX): Ardelyx, Inc., a biopharmaceutical company, develops and sells medicines for the treatment of cardiorenal diseases in the United States and internationally. The US$515m market-cap posted a loss in its most recent financial year of US$94.9m and a latest trailing-twelve-month loss of US$90.7m shrinking the gap between loss and breakeven. As path to profitability is the topic on ARDX’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ARDX, its year of breakeven and its implied growth rate.
See our latest analysis for Ardelyx
According to the 4 industry analysts covering ARDX, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$98m in 2023. Therefore, ARDX is expected to breakeven roughly 3 years from now. What rate will ARDX 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 79%, which signals high confidence from analysts. If this rate turns out to be too aggressive, ARDX may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for ARDX given that this is a high-level summary, but, bear 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before I wrap up, there’s one aspect worth mentioning. ARDX has managed its capital prudently, with debt making up 34% of equity. This means that ARDX has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of ARDX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ARDX, take a look at ARDX’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:
- Valuation: What is ARDX 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 ARDX 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 Ardelyx’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.
If you’re looking to trade Ardelyx, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
About NasdaqGM:ARDX
Ardelyx
Ardelyx, Inc. discovers, develops, and commercializes medicines to treat unmet medical needs in the United States and internationally.
Exceptional growth potential and undervalued.
Market Insights
Community Narratives
