When Will Shield Therapeutics plc (LON:STX) Breakeven?

Shield Therapeutics plc (LON:STX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Shield Therapeutics plc, a commercial stage specialty pharmaceutical company, focuses on commercialization of pharmaceuticals to treat unmet medical needs. The UK£28m market-cap company announced a latest loss of US$27m on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is Shield Therapeutics' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to the 3 industry analysts covering Shield Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$32m in 2027. So, the company is predicted to breakeven approximately 2 years from now. 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 89% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Shield Therapeutics' growth isn’t the focus of this broad overview, though, bear in mind that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

See our latest analysis for Shield Therapeutics

One thing we would like to bring into light with Shield Therapeutics 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:

There are too many aspects of Shield Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Shield Therapeutics' company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Shield Therapeutics 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 Shield Therapeutics 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 Shield Therapeutics’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.