Breakeven On The Horizon For GeNeuro SA (EPA:GNRO)

By
Simply Wall St
Published
March 14, 2021
ENXTPA:GNRO

GeNeuro SA (EPA:GNRO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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. The most pressing concern for investors is GeNeuro's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for GeNeuro

Consensus from 2 of the French Biotechs analysts is that GeNeuro is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of €81m in 2022. The company is therefore projected to breakeven just over a year 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 137% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
ENXTPA:GNRO Earnings Per Share Growth March 14th 2021

Given this is a high-level overview, we won’t go into details of GeNeuro's upcoming projects, however, 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 2.2% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

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 aspects you should further research:

  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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