Eton Pharmaceuticals, Inc. (NASDAQ:ETON) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Eton Pharmaceuticals, Inc.'s (NASDAQ:ETON) business as it appears the company may be on the cusp of a considerable accomplishment. Eton Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on developing, acquiring, and commercializing pharmaceutical products for rare diseases. The US$372m market-cap company posted a loss in its most recent financial year of US$936k and a latest trailing-twelve-month loss of US$5.5m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Eton Pharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Eton Pharmaceuticals

Eton Pharmaceuticals is bordering on breakeven, according to the 3 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$9.4m in 2025. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 46% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Eton Pharmaceuticals' upcoming projects, though, bear in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 26% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Eton Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Eton Pharmaceuticals' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is Eton Pharmaceuticals 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 Eton Pharmaceuticals 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 Eton Pharmaceuticals’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.