When Will ABIVAX Société Anonyme (EPA:ABVX) Turn A Profit?

By
Simply Wall St
Published
February 19, 2022
ENXTPA:ABVX
Source: Shutterstock

ABIVAX Société Anonyme (EPA:ABVX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ABIVAX Société Anonyme discovers and optimizes drugs for the treatment of inflammatory diseases, infectious diseases, and cancer in France. With the latest financial year loss of €38m and a trailing-twelve-month loss of €39m, the €337m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on ABIVAX Société Anonyme's 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.

View our latest analysis for ABIVAX Société Anonyme

ABIVAX Société Anonyme is bordering on breakeven, according to the 4 French Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of €67m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. 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 50% is expected, 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.

earnings-per-share-growth
ENXTPA:ABVX Earnings Per Share Growth February 19th 2022

Underlying developments driving ABIVAX Société Anonyme's growth isn’t the focus of this broad overview, however, keep in mind that generally biotechs, 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.

One thing we would like to bring into light with ABIVAX Société Anonyme is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

  1. Valuation: What is ABIVAX Société Anonyme 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 ABIVAX Société Anonyme 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 ABIVAX Société Anonyme’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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