Loss-Making Abeona Therapeutics Inc. (NASDAQ:ABEO) Set To Breakeven

We feel now is a pretty good time to analyse Abeona Therapeutics Inc.'s (NASDAQ:ABEO) business as it appears the company may be on the cusp of a considerable accomplishment. Abeona Therapeutics Inc., a clinical-stage biopharmaceutical company, develops gene and cell therapies for life-threatening diseases. The US$320m market-cap company’s loss lessened since it announced a US$64m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$44m, as it approaches breakeven. The most pressing concern for investors is Abeona 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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Consensus from 7 of the American Biotechs analysts is that Abeona Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$3.7m in 2025. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? 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! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Abeona Therapeutics' upcoming projects, but, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Abeona Therapeutics

One thing we would like to bring into light with Abeona Therapeutics is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Abeona Therapeutics' case is 47%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Abeona Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Abeona Therapeutics' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Valuation: What is Abeona 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 Abeona 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 Abeona 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.