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When Will Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Turn A Profit?
With the business potentially at an important milestone, we thought we'd take a closer look at Amylyx Pharmaceuticals, Inc.'s (NASDAQ:AMLX) future prospects. Amylyx Pharmaceuticals, Inc., a commercial-stage biotechnology company, engages in the discovery and development of treatment for amyotrophic lateral sclerosis (ALS) and neurodegenerative diseases. On 31 December 2022, the US$2.1b market-cap company posted a loss of US$198m for its most recent financial year. Many investors are wondering about the rate at which Amylyx Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Amylyx Pharmaceuticals
Consensus from 5 of the American Pharmaceuticals analysts is that Amylyx Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$197m in 2024. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Amylyx Pharmaceuticals given that this is a high-level summary, however, keep in mind that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Amylyx Pharmaceuticals has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of Amylyx Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Amylyx Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of important factors you should look at:
- Valuation: What is Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Amylyx Pharmaceuticals’s board and the CEO’s background.
- 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.
Valuation is complex, but we're helping make it simple.
Find out whether Amylyx Pharmaceuticals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
Amylyx Pharmaceuticals, Inc., a commercial-stage biotechnology company, engages in the discovery and development of treatment for amyotrophic lateral sclerosis (ALS) and neurodegenerative diseases.
Exceptional growth potential with excellent balance sheet.