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BioMarin Pharmaceutical Inc.’s (NASDAQ:BMRN): BioMarin Pharmaceutical, Inc., a biotechnology company, develops and commercializes therapies for people with serious and life-threatening rare diseases and medical conditions. With the latest financial year loss of -US$117.0m and a trailing-twelve month of -US$125.0m, the US$17b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is BMRN’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for BMRN.
According to the 24 industry analysts covering BMRN, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$192m in 2020. So, BMRN is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which BMRN must grow year-on-year. It turns out an average annual growth rate of 60% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, BMRN may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for BMRN 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one issue worth mentioning. BMRN currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in BMRN’s case is 41%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
There are too many aspects of BMRN to cover in one brief article, but the key fundamentals for the company can all be found in one place – BMRN’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should look at:
- Valuation: What is BMRN 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 BMRN 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 BioMarin Pharmaceutical’s board and the CEO’s back ground.
- 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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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.