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.
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.
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:
- 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.
- 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.
- 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.