When Will Coherus BioSciences, Inc. (NASDAQ:CHRS) Turn A Profit?

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Coherus BioSciences, Inc.’s (NASDAQ:CHRS): Coherus BioSciences, Inc., a commercial-stage biotherapeutics company, focuses on the biosimilar market worldwide. On 31 December 2018, the US$1.1b market-cap posted a loss of -US$209.3m for its most recent financial year. As path to profitability is the topic on CHRS’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CHRS.

View our latest analysis for Coherus BioSciences

According to the 4 industry analysts covering CHRS, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$6.3m in 2021. CHRS is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, I calculated the rate at which CHRS must grow year-on-year. It turns out an average annual growth rate of 74% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:CHRS Past and Future Earnings, May 2nd 2019
NasdaqGM:CHRS Past and Future Earnings, May 2nd 2019

Underlying developments driving CHRS’s growth isn’t the focus of this broad overview, but, keep 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. 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. CHRS currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of CHRS to cover in one brief article, but the key fundamentals for the company can all be found in one place – CHRS’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:

  1. Valuation: What is CHRS 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 CHRS 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 Coherus BioSciences’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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.