Stock Analysis

NEXGEL, Inc.'s (NASDAQ:NXGL) Path To Profitability

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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 high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels. The company’s loss has recently broadened since it announced a US$4.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$5.7m, moving it further away from breakeven. The most pressing concern for investors is NEXGEL's 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.

See our latest analysis for NEXGEL

According to some industry analysts covering NEXGEL, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$3.4m in 2025. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 63%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

NasdaqCM:NXGL Earnings Per Share Growth March 17th 2023

Given this is a high-level overview, we won’t go into details of NEXGEL's upcoming projects, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 3.4% 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 NEXGEL 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 NEXGEL, take a look at NEXGEL's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

  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.

What are the risks and opportunities for NEXGEL?

NEXGEL, Inc. manufactures high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels.

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  • Does not have a meaningful market cap ($8M)

  • Does not have meaningful revenue ($2M)

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