When Can We Expect A Profit From argenx SE (EBR:ARGX)?

With the business potentially at an important milestone, we thought we'd take a closer look at argenx SE's (EBR:ARGX) future prospects. argenx SE, a biotechnology company, engages in the developing of various therapies for the treatment of autoimmune diseases in the United States, Japan, Europe, Middle East, Africa, and China. The €20b market-cap company posted a loss in its most recent financial year of US$295m and a latest trailing-twelve-month loss of US$328m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which argenx will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for argenx

Consensus from 30 of the Belgian Biotechs analysts is that argenx is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$182m in 2025. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 60% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for argenx given that this is a high-level summary, but, bear in mind that typically biotechs, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.5% of equity. This means that it 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 argenx which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at argenx, take a look at argenx's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is argenx 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 argenx 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 argenx’s board and the CEO’s background.
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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.