Evolus, Inc. (NASDAQ:EOLS): Is Breakeven Near?

Evolus, Inc. (NASDAQ:EOLS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Evolus, Inc., a performance beauty company, focuses on delivering products in the cash-pay aesthetic market in the United States, Canada, and Europe. The US$988m market-cap company’s loss lessened since it announced a US$62m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$53m, as it approaches breakeven. Many investors are wondering about the rate at which Evolus will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Evolus

According to the 7 industry analysts covering Evolus, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$44m in 2026. The company is therefore projected to breakeven around 2 years from now. 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 69% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Evolus' growth isn’t the focus of this broad overview, but, keep in mind that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. Evolus currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Evolus, so if you are interested in understanding the company at a deeper level, take a look at Evolus' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is Evolus 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 Evolus 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 Evolus’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.