Theranexus Société Anonyme's (EPA:ALTHX) Has Found A Path To Profitability

We feel now is a pretty good time to analyse Theranexus Société Anonyme's (EPA:ALTHX) business as it appears the company may be on the cusp of a considerable accomplishment. Theranexus société anonyme, a biopharmaceutical company, develops drug candidates for the treatment of central nervous system disorders. With the latest financial year loss of €5.6m and a trailing-twelve-month loss of €5.7m, the €39m market-cap company amplified its loss by moving further away from its breakeven target. 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?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Theranexus Société Anonyme

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 €600k in 2021. Therefore, the company is expected to breakeven roughly 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 -79% is expected,

We're not going to go through company-specific developments for Theranexus Société Anonyme given that this is a high-level summary, but, 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. So, periods of lower growth in the upcoming years 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 Theranexus Société Anonyme is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Theranexus Société Anonyme's case is 53%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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 put together a list of important aspects you should further examine:

1. 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.
2. 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.
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. 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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