Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE): Are Analysts Optimistic?

Zynerba Pharmaceuticals, Inc.’s (NASDAQ:ZYNE): Zynerba Pharmaceuticals, Inc. operates as a clinical stage specialty pharmaceutical company. With the latest financial year loss of -US$32.9m and a trailing-twelve month of -US$36.1m, the US$140m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on ZYNE’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for ZYNE.

See our latest analysis for Zynerba Pharmaceuticals

According to the 7 industry analysts covering ZYNE, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$789k in 2022. ZYNE is therefore projected to breakeven around 2 years from today. How fast will ZYNE 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 79% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, ZYNE may become profitable much later than analysts predict.

NasdaqGM:ZYNE Past and Future Earnings June 3rd 2020
NasdaqGM:ZYNE Past and Future Earnings June 3rd 2020

Given this is a high-level overview, I won’t go into details of ZYNE’s upcoming projects, however, keep in mind that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing I’d like to point out is that ZYNE has no debt on its balance sheet, which is rare for a loss-making pharma, which typically has high debt relative to its equity. ZYNE currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of ZYNE 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 ZYNE, take a look at ZYNE’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:

  1. Valuation: What is ZYNE 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 ZYNE 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 Zynerba Pharmaceuticals’s board and the CEO’s back ground.
  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.

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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. Thank you for reading.