Valneva SE (EPA:VLA): Is Breakeven Near?

We feel now is a pretty good time to analyse Valneva SE's (EPA:VLA) business as it appears the company may be on the cusp of a considerable accomplishment. Valneva SE, a specialty vaccine company, develops, manufactures, and commercializes prophylactic vaccines for infectious diseases with unmet needs. With the latest financial year loss of €12m and a trailing-twelve-month loss of €80m, the €414m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Valneva 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.

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Consensus from 6 of the French Biotechs analysts is that Valneva is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of €87m in 2027. So, the company is predicted to breakeven approximately 2 years 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 60% is expected, 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 Valneva's upcoming projects, however, take into account that typically 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.

Check out our latest analysis for Valneva

One thing we would like to bring into light with Valneva is its debt-to-equity ratio of 103%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Valneva worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Valneva is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Valneva’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.