Paratek Pharmaceuticals, Inc.’s (NASDAQ:PRTK): Paratek Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of therapeutics based upon biology and tetracycline chemistry in the United States. The company’s loss has recently broadened since it announced a -US$112.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$124.2m, moving it further away from breakeven. The most pressing concern for investors is PRTK’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for PRTK.
According to the 6 industry analysts covering PRTK, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$26m in 2022. Therefore, PRTK is expected to breakeven roughly 3 years from today. In order to meet this breakeven date, I calculated the rate at which PRTK must grow year-on-year. It turns out an average annual growth rate of 59% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, PRTK may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of PRTK’s upcoming projects, though, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I would like to bring into light with PRTK is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are too many aspects of PRTK to cover in one brief article, but the key fundamentals for the company can all be found in one place – PRTK’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further research:
- Valuation: What is PRTK 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 PRTK 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 Paratek Pharmaceuticals’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 spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.