NEXGEL, Inc. (NASDAQ:NXGL) Is Expected To Breakeven In The Near Future

NEXGEL, Inc. (NASDAQ:NXGL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. NEXGEL, Inc. manufactures and sells high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels for wound care, medical diagnostics, transdermal drug delivery, and cosmetics in the United States. The US$21m market-cap company’s loss lessened since it announced a US$3.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$3.1m, as it approaches breakeven. The most pressing concern for investors is NEXGEL's 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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NEXGEL is bordering on breakeven, according to some American Medical Equipment analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$2.4m in 2026. Therefore, the company is expected to breakeven just over a year from now. 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 62% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for NEXGEL given that this is a high-level summary, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for NEXGEL

One thing we’d like to point out is that 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:

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

1. Historical Track Record: What has NEXGEL's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on NEXGEL'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.