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Anatara Lifesciences Limited’s (ASX:ANR): Anatara Lifesciences Limited engages in the development of non-antibiotic oral solutions for gastro intestinal diseases in animals and humans in Australia. With the latest financial year loss of -AU$3.6m and a trailing-twelve month of -AU$3.9m, the AU$16m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is ANR’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for ANR’s growth and when analysts expect the company to become profitable.
Expectation from Biotechs analysts is ANR is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of AU$1.0m in 2021. Therefore, ANR is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which ANR must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which is rather optimistic! If this rate turns out to be too aggressive, ANR may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of ANR’s upcoming projects, however, keep in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that ANR has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. ANR currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are key fundamentals of ANR 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 ANR, take a look at ANR’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further examine:
- Valuation: What is ANR 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 ANR 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 Anatara Lifesciences’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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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. Thank you for reading.