Advicenne S.A. (EPA:ALDVI): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Advicenne S.A.'s (EPA:ALDVI) future prospects. Advicenne S.A., a specialty pharmaceutical company, develops, commercializes, and markets treatments for rare renal diseases. The €14m market-cap company announced a latest loss of €7.0m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Advicenne will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Advicenne

Advicenne is bordering on breakeven, according to the 2 French Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of €22m in 2025. Therefore, the company is expected to breakeven just over a year 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 117%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Advicenne given that this is a high-level summary, however, take into account that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Advicenne is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are too many aspects of Advicenne to cover in one brief article, but the key fundamentals for the company can all be found in one place – Advicenne'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 Advicenne 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 Advicenne 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 Advicenne’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