Breakeven Is Near for Poxel S.A. (EPA:POXEL)

We feel now is a pretty good time to analyse Poxel S.A.'s (EPA:POXEL) business as it appears the company may be on the cusp of a considerable accomplishment. Poxel S.A., a clinical-stage biopharmaceutical company, develops novel treatments for metabolic diseases, type 2 diabetes, and liver diseases. The company’s loss has recently broadened since it announced a €31m loss in the full financial year, compared to the latest trailing-twelve-month loss of €44m, moving it further away from breakeven. The most pressing concern for investors is Poxel'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 Poxel

Poxel is bordering on breakeven, according to some French Biotechs analysts. They expect the company to post a final loss in 2023, before turning a profit of €26m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 22%, 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 Poxel given that this is a high-level summary, however, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high 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. Poxel currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Poxel which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Poxel, take a look at Poxel's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

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