EuBiologics Co., Ltd. (KOSDAQ:206650) Has Found A Path To Profitability

We feel now is a pretty good time to analyse EuBiologics Co., Ltd.'s (KOSDAQ:206650) business as it appears the company may be on the cusp of a considerable accomplishment. EuBiologics Co., Ltd., a biopharmaceutical company, provides vaccines for epidemics in South Korea. On 31 December 2023, the ₩507b market-cap company posted a loss of ₩14b for its most recent financial year. Many investors are wondering about the rate at which EuBiologics 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.

Check out our latest analysis for EuBiologics

Expectations from some of the South Korean Biotechs analysts is that EuBiologics is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of ₩29b in 2024. Therefore, the company is expected to breakeven roughly 12 months 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 93%, which signals high confidence from analysts. 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 EuBiologics given that this is a high-level summary, though, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 12% 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 EuBiologics, so if you are interested in understanding the company at a deeper level, take a look at EuBiologics' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is EuBiologics 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 EuBiologics 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 EuBiologics’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.