Analysts Expect Breakeven For GeNeuro SA (EPA:GNRO) Before Long

We feel now is a pretty good time to analyse GeNeuro SA's (EPA:GNRO) business as it appears the company may be on the cusp of a considerable accomplishment. GeNeuro SA, a clinical-stage biopharmaceutical company, develops drugs for the treatment of neurodegenerative and autoimmune diseases. The €63m market-cap company’s loss lessened since it announced a €9.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of €8.9m, as it approaches breakeven. Many investors are wondering about the rate at which GeNeuro 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.

View our latest analysis for GeNeuro

GeNeuro is bordering on breakeven, according to some French Biotechs analysts. They expect the company to post a final loss in 2021, before turning a profit of €202m in 2022. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 132% year-on-year, on average, 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 GeNeuro's upcoming projects, though, take into account 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, 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 GeNeuro 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on GeNeuro, so if you are interested in understanding the company at a deeper level, take a look at GeNeuro's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Historical Track Record: What has GeNeuro'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 GeNeuro'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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