Stock Analysis

When Will Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) Breakeven?

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NasdaqGM:ARCT
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We feel now is a pretty good time to analyse Arcturus Therapeutics Holdings Inc.'s (NASDAQ:ARCT) business as it appears the company may be on the cusp of a considerable accomplishment. 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$26m and a trailing-twelve-month loss of US$52m, the US$1.8b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Arcturus Therapeutics Holdings' 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.

See our latest analysis for Arcturus Therapeutics Holdings

Consensus from 11 of the American Biotechs analysts is that Arcturus Therapeutics Holdings is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$184m in 2022. Therefore, the company is expected 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 54% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqGM:ARCT Earnings Per Share Growth January 25th 2021

We're not going to go through company-specific developments for Arcturus Therapeutics Holdings given that this is a high-level summary, however, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. 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 The company has managed its capital prudently, with debt making up 5.8% 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:

There are too many aspects of Arcturus Therapeutics Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Arcturus Therapeutics Holdings' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

  1. Valuation: What is Arcturus Therapeutics Holdings 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 Arcturus Therapeutics Holdings 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 Arcturus Therapeutics Holdings’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.

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