argenx SE (EBR:ARGX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. argenx SE, a biotechnology company, engages in the developing of various therapies for the treatment of autoimmune diseases in the United States, the Netherlands, Belgium, Japan, Switzerland, Germany, France, Canada, the United Kingdom, and Italy. The €27b market-cap company’s loss lessened since it announced a US$710m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$234m, as it approaches breakeven. As path to profitability is the topic on argenx's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 26 of the Belgian Biotechs analysts is that argenx is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$437m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 72%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of argenx's upcoming projects, but, keep in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.4% 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.
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 pertinent factors you should look at:
- 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.
- 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.
- 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.
Valuation is complex, but we're helping make it simple.
Find out whether argenx is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
argenx SE, a biotechnology company, engages in the developing of various therapies for the treatment of autoimmune diseases in the United States, the Netherlands, Belgium, Japan, Switzerland, Germany, France, Canada, the United Kingdom, and Italy.
High growth potential with adequate balance sheet.