When Will Aytu BioPharma, Inc. (NASDAQ:AYTU) Turn A Profit?

We feel now is a pretty good time to analyse Aytu BioPharma, Inc.'s (NASDAQ:AYTU) business as it appears the company may be on the cusp of a considerable accomplishment. Aytu Biopharma, Inc., a commercial-stage pharmaceutical company, focuses on commercializing novel therapeutics and consumer healthcare products the United States and internationally. The US$15m market-cap company posted a loss in its most recent financial year of US$17m and a latest trailing-twelve-month loss of US$14m shrinking the gap between loss and breakeven. The most pressing concern for investors is Aytu BioPharma's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Aytu BioPharma

Aytu BioPharma is bordering on breakeven, according to some American Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of US$3.9m in 2025. So, the company is predicted to breakeven just over a year from now. 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 96% is expected, which is rather optimistic! 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 Aytu BioPharma given that this is a high-level summary, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Aytu BioPharma is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Aytu BioPharma's case is 54%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Aytu BioPharma which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Aytu BioPharma, take a look at Aytu BioPharma's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Valuation: What is Aytu BioPharma 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 Aytu BioPharma 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 Aytu BioPharma’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.