Day One Biopharmaceuticals, Inc.'s (NASDAQ:DAWN) Profit Outlook

Day One Biopharmaceuticals, Inc. (NASDAQ:DAWN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Day One Biopharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops and commercializes targeted therapies for patients with genomically defined cancers. On 31 December 2024, the US$1.2b market-cap company posted a loss of US$95m for its most recent financial year. The most pressing concern for investors is Day One Biopharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Day One Biopharmaceuticals

According to the 10 industry analysts covering Day One Biopharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$61m in 2027. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Day One Biopharmaceuticals' growth isn’t the focus of this broad overview, but, take into account 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 Day One Biopharmaceuticals has no debt on its balance sheet, which is rare for a loss-making 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:

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

1. Valuation: What is Day One Biopharmaceuticals 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 Day One Biopharmaceuticals 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 Day One Biopharmaceuticals’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.