Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Arcturus Therapeutics Holdings Inc., an RNA medicines company, focuses on the treatment of liver and respiratory care diseases. With the latest financial year loss of US$72m and a trailing-twelve-month loss of US$196m, the US$645m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Arcturus Therapeutics Holdings will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 10 industry analysts covering Arcturus Therapeutics Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$196m in 2023. So, the company is predicted 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 52% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Arcturus Therapeutics Holdings given that this is a high-level summary, however, bear in mind that by and large 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 23% 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.
This article is not intended to be a comprehensive analysis on Arcturus Therapeutics Holdings, so if you are interested in understanding the company at a deeper level, take a look at Arcturus Therapeutics Holdings' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
- Historical Track Record: What has Arcturus Therapeutics Holdings' 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 Arcturus Therapeutics Holdings' 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.
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.