Loss-Making Citius Oncology, Inc. (NASDAQ:CTOR) Expected To Breakeven In The Medium-Term

Citius Oncology, Inc. (NASDAQ:CTOR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Citius Oncology, Inc. focuses on the development of novel targeted oncology therapies. The company’s loss has recently broadened since it announced a US$13m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$20m, moving it further away from breakeven. As path to profitability is the topic on Citius Oncology's investors mind, we've decided to gauge market sentiment. 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 Citius Oncology

Expectations from some of the American Biotechs analysts is that Citius Oncology is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$40m in 2027. So, the company is predicted to breakeven approximately 3 years from today. 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 58% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Citius Oncology's upcoming projects, but, take into account that generally 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. Citius Oncology currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Citius Oncology 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 Citius Oncology, take a look at Citius Oncology's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Citius Oncology 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 Citius Oncology 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 Citius Oncology’s 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.