Market Sentiment Around Loss-Making Aldeyra Therapeutics, Inc. (NASDAQ:ALDX)

With the business potentially at an important milestone, we thought we'd take a closer look at Aldeyra Therapeutics, Inc.'s (NASDAQ:ALDX) future prospects. Aldeyra Therapeutics, Inc., a biotechnology company, discovers and develops therapies designed to treat immune-mediated and metabolic diseases. The US$258m market-cap company posted a loss in its most recent financial year of US$56m and a latest trailing-twelve-month loss of US$58m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Aldeyra Therapeutics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Consensus from 6 of the American Biotechs analysts is that Aldeyra Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$6.5m in 2026. The company is therefore projected to breakeven just over a year 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 74% is expected, which signals high confidence from analysts. 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 Aldeyra Therapeutics' upcoming projects, but, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

View our latest analysis for Aldeyra Therapeutics

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 24% 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 Aldeyra Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Aldeyra Therapeutics' company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is Aldeyra 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 Aldeyra 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 Aldeyra 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.