Eiger BioPharmaceuticals Inc (NASDAQ:EIGR): When Will It Breakeven?

Eiger BioPharmaceuticals Inc’s (NASDAQ:EIGR): Eiger BioPharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of targeted therapies for rare diseases in the United States and internationally. With the latest financial year loss of -US$42.45m and a trailing-twelve month of -US$40.04m, the US$195.05m market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which EIGR will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for EIGR.

See our latest analysis for Eiger BioPharmaceuticals

EIGR is bordering on breakeven, according to Biotechs analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$11.55m in 2022. EIGR is therefore projected to breakeven around a few months from now. What rate will EIGR have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 17.39%, which is relatively reasonable. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:EIGR Past Future Earnings June 22nd 18
NasdaqGM:EIGR Past Future Earnings June 22nd 18

I’m not going to go through company-specific developments for EIGR given that this is a high-level summary, but, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, a double-digit growth rate is not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one issue worth mentioning. EIGR currently has a debt-to-equity ratio of 103.12%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and EIGR has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

  1. Historical Track Record: What has EIGR’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 Eiger BioPharmaceuticals’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.