Stock Analysis

When Will Capricor Therapeutics, Inc. (NASDAQ:CAPR) Turn A Profit?

NasdaqCM:CAPR
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Capricor Therapeutics, Inc. (NASDAQ:CAPR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Capricor Therapeutics, Inc., a clinical-stage biotechnology company, focuses on the discovery, development, and commercialization of biological therapies for the treatment of diseases, with a focus on Duchenne muscular dystrophy (DMD), and other rare disorders. The US$106m market-cap company announced a latest loss of US$14m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Capricor Therapeutics 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.

See our latest analysis for Capricor Therapeutics

According to some industry analysts covering Capricor Therapeutics, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$27m in 2023. Therefore, the company is expected to breakeven roughly 2 years 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 59% 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
NasdaqCM:CAPR Earnings Per Share Growth March 13th 2021

Underlying developments driving Capricor Therapeutics' growth isn’t the focus of this broad overview, however, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.0% 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:

This article is not intended to be a comprehensive analysis on Capricor Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Capricor Therapeutics' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

  1. Historical Track Record: What has Capricor Therapeutics' 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.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Capricor Therapeutics' 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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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. 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.
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