Analysts Are Optimistic We'll See A Profit From Theratechnologies Inc. (TSE:TH)

With the business potentially at an important milestone, we thought we'd take a closer look at Theratechnologies Inc.'s (TSE:TH) future prospects. Theratechnologies Inc., a biopharmaceutical company, focuses on the development and commercialization of various therapies to address the unmet medical needs in the United States, Canada, and Europe. The CA$82m market-cap company’s loss lessened since it announced a US$24m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$18m, as it approaches breakeven. As path to profitability is the topic on Theratechnologies' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Theratechnologies

According to the 4 industry analysts covering Theratechnologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$153k in 2024. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 65% is expected, which signals high confidence from analysts. 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 Theratechnologies' upcoming projects, though, bear in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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 issue worth mentioning. Theratechnologies currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Theratechnologies, so if you are interested in understanding the company at a deeper level, take a look at Theratechnologies' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is Theratechnologies 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 Theratechnologies 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 Theratechnologies’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com