Egetis Therapeutics AB (publ)'s (STO:EGTX) Profit Outlook

Egetis Therapeutics AB (publ) (STO:EGTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Egetis Therapeutics AB (publ), a pharmaceutical company, focuses on projects in late-stage development for the treatment of serious diseases with unmet medical needs in the orphan drug segment. The kr2.5b market-cap company posted a loss in its most recent financial year of kr344m and a latest trailing-twelve-month loss of kr337m shrinking the gap between loss and breakeven. The most pressing concern for investors is Egetis Therapeutics' path to profitability – when will it 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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Egetis Therapeutics is bordering on breakeven, according to the 4 Swedish Biotechs analysts. They expect the company to post a final loss in 2025, before turning a profit of kr96m in 2026. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 85% year-on-year, on average, 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 Egetis Therapeutics given that this is a high-level summary, though, take into account that by and large 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.

Check out our latest analysis for Egetis Therapeutics

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 25% 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 Egetis Therapeutics 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 Egetis Therapeutics, take a look at Egetis Therapeutics' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is Egetis 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 Egetis 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 Egetis 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.