Theralase Technologies Inc.'s (CVE:TLT) Path To Profitability

We feel now is a pretty good time to analyse Theralase Technologies Inc.'s (CVE:TLT) business as it appears the company may be on the cusp of a considerable accomplishment. Theralase Technologies Inc., a clinical stage pharmaceutical company, engages in the research and development of light activated photo dynamic compounds (PDCs) and their associated drug formulations to treat cancers, bacteria, and viruses in Canada, the United States, and internationally. The CA$74m market-cap company’s loss lessened since it announced a CA$4.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$4.3m, as it approaches breakeven. As path to profitability is the topic on Theralase Technologies' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Theralase Technologies

According to some industry analysts covering Theralase Technologies, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of CA$5.6m in 2026. So, the company is predicted to breakeven approximately 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 75%, which signals high confidence from analysts. 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 Theralase Technologies given that this is a high-level summary, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Theralase Technologies has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company 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 too many aspects of Theralase Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Theralase Technologies' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Historical Track Record: What has Theralase Technologies' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Theralase Technologies' 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.