Aclaris Therapeutics, Inc.'s (NASDAQ:ACRS) Path To Profitability

By
Simply Wall St
Published
February 28, 2021
NasdaqGS:ACRS

Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aclaris Therapeutics, Inc., a biopharmaceutical company, focuses on developing drug candidates for immuno-inflammatory diseases in the United States. On 31 December 2020, the US$1.1b market-cap company posted a loss of US$51m for its most recent financial year. As path to profitability is the topic on Aclaris Therapeutics' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Aclaris Therapeutics

According to the 4 industry analysts covering Aclaris Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$2.0m in 2023. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 12% is expected, which seems realistic. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqGS:ACRS Earnings Per Share Growth February 28th 2021

Given this is a high-level overview, we won’t go into details of Aclaris Therapeutics' upcoming projects, but, take into account that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a double-digit growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 20% 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 Aclaris Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Aclaris Therapeutics' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

  1. Historical Track Record: What has Aclaris Therapeutics' 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 Aclaris Therapeutics' 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. 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.
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