ALTEOGEN Inc.'s (KOSDAQ:196170) Has Found A Path To Profitability

We feel now is a pretty good time to analyse ALTEOGEN Inc.'s (KOSDAQ:196170) business as it appears the company may be on the cusp of a considerable accomplishment. ALTEOGEN Inc., a bio company, focuses on developing long-acting biobetters, proprietary antibody-drug conjugates, and antibody biosimilars. On 31 December 2020, the ₩3.7t market-cap company posted a loss of ₩970m for its most recent financial year. Many investors are wondering about the rate at which ALTEOGEN 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.

See our latest analysis for ALTEOGEN

ALTEOGEN is bordering on breakeven, according to some South Korean Biotechs analysts. They expect the company to post a final loss in 2020, before turning a profit of ₩2.8b in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 110% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving ALTEOGEN's growth isn’t the focus of this broad overview, though, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 2.6% 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:

There are key fundamentals of ALTEOGEN 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 ALTEOGEN, take a look at ALTEOGEN's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is ALTEOGEN 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 ALTEOGEN 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 ALTEOGEN’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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