Catabasis Pharmaceuticals Inc (NASDAQ:CATB): Are Analysts Optimistic?

Catabasis Pharmaceuticals Inc’s (NASDAQ:CATB): Catabasis Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the discovery, development, and commercialization of therapeutic products based on safely metabolized and rationally targeted (SMART) linker drug discovery platform in the United States. With the latest financial year loss of -US$36.06M and a trailing-twelve month of -US$30.64M, the US$45.70M market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which CATB will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for CATB, its year of breakeven and its implied growth rate.

View our latest analysis for Catabasis Pharmaceuticals

Expectation from analysts is CATB is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$19.04M in 2022. CATB is therefore projected to breakeven around 4 years from now. How fast will CATB have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 9.54% year-on-year, on average, which is fair. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.

NasdaqGM:CATB Past Future Earnings Mar 15th 18
NasdaqGM:CATB Past Future Earnings Mar 15th 18

Underlying developments driving CATB’s growth isn’t the focus of this broad overview, though, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. CATB has managed its capital judiciously, with debt making up 21.05% of equity. This means that CATB 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 CATB, so if you are interested in understanding the company at a deeper level, take a look at CATB’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:

  1. Historical Track Record: What has CATB’s 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 Catabasis Pharmaceuticals’s board and the CEO’s back ground.
  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.