Analysts Expect Breakeven For Mithra Pharmaceuticals SA (EBR:MITRA) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Mithra Pharmaceuticals SA's (EBR:MITRA) future prospects. Mithra Pharmaceuticals SA develops, manufactures, and markets complex therapeutics in the areas of contraception, menopause, and hormone-dependent cancers in Europe and internationally. The €832m market-cap company announced a latest loss of €27m on 31 December 2019 for its most recent financial year result. As path to profitability is the topic on Mithra Pharmaceuticals' 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.

View our latest analysis for Mithra Pharmaceuticals

According to the 3 industry analysts covering Mithra Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €86m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company 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 67% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Mithra Pharmaceuticals given that this is a high-level summary, though, take into account that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. 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 issue worth mentioning. Mithra Pharmaceuticals currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Mithra Pharmaceuticals' case is 89%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Mithra Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Mithra Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is Mithra Pharmaceuticals 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 Mithra Pharmaceuticals 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 Mithra Pharmaceuticals’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. 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.
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