With the business potentially at an important milestone, we thought we'd take a closer look at Cardiol Therapeutics Inc.'s (TSE:CRDL) future prospects. Cardiol Therapeutics Inc., a clinical-stage biotechnology company, focuses on the research and development of anti-inflammatory therapies for the treatment of cardiovascular disease (CVD). With the latest financial year loss of CA$21m and a trailing-twelve-month loss of CA$35m, the CA$116m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Cardiol Therapeutics will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 5 industry analysts covering Cardiol Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$47m in 2024. The company is therefore projected to breakeven around 2 years from now. 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 61% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Cardiol Therapeutics' growth isn’t the focus of this broad overview, though, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that Cardiol Therapeutics has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, 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.
There are too many aspects of Cardiol Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cardiol Therapeutics' company page on Simply Wall St. We've also put together a list of essential aspects you should further research:
- Valuation: What is Cardiol Therapeutics 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 Cardiol Therapeutics 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 Cardiol Therapeutics’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.
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.