We feel now is a pretty good time to analyse ChemoCentryx, Inc.'s (NASDAQ:CCXI) business as it appears the company may be on the cusp of a considerable accomplishment. ChemoCentryx, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of new medications for inflammatory disorders, autoimmune diseases, and cancer in the United States. The US$4.7b market-cap company announced a latest loss of US$55m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is ChemoCentryx'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.
According to the 8 industry analysts covering ChemoCentryx, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$151m 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 53% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of ChemoCentryx's upcoming projects, however, bear in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 6.0% 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.
There are key fundamentals of ChemoCentryx 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 ChemoCentryx, take a look at ChemoCentryx's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
- Valuation: What is ChemoCentryx 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 ChemoCentryx 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 ChemoCentryx’s board and the CEO’s background.
- 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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