Theranexus Société Anonyme (EPA:ALTHX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Theranexus société anonyme, a biopharmaceutical company, develops drug candidates for the treatment of central nervous system disorders. On 31 December 2020, the €36m market-cap company posted a loss of €4.8m for its most recent financial year. Many investors are wondering about the rate at which Theranexus Société Anonyme will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 2 industry analysts covering Theranexus Société Anonyme, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of €8.4m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 19% year-on-year, on average, which is relatively reasonable. 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 Theranexus Société Anonyme given that this is a high-level summary, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a double-digit growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Theranexus Société Anonyme currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Theranexus Société Anonyme's case is 55%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Theranexus Société Anonyme, so if you are interested in understanding the company at a deeper level, take a look at Theranexus Société Anonyme's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:
- Historical Track Record: What has Theranexus Société Anonyme's 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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Theranexus Société Anonyme'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.
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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.
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