Affimed NV’s (NASDAQ:AFMD): Affimed N.V., a clinical-stage biopharmaceutical company, focuses on discovering and developing cancer immunotherapies in the United States, Europe, and Germany. With the latest financial year loss of -US$30.22m and a trailing-twelve month of -US$30.67m, the US$104.50m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is AFMD’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for AFMD’s growth and when analysts expect the company to become profitable.See our latest analysis for Affimed
Expectation from Biotechs analysts is AFMD is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$16.90m in 2022. AFMD is therefore projected to breakeven around a couple of months from now! In order to meet this breakeven date, I calculated the rate at which AFMD must grow year-on-year. It turns out an average annual growth rate of 27.11% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, AFMD may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for AFMD given that this is a high-level summary, however, bear in mind that typically 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.
Before I wrap up, there’s one aspect worth mentioning. AFMD has managed its capital prudently, with debt making up 12.10% of equity. This means that AFMD has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on AFMD, so if you are interested in understanding the company at a deeper level, take a look at AFMD’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:
- Historical Track Record: What has AFMD’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Affimed’s board and the CEO’s back ground.
- 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.