Fortress Biotech, Inc.'s (NASDAQ:FBIO) Path To Profitability

By
Simply Wall St
Published
April 09, 2022
NasdaqCM:FBIO
Source: Shutterstock

We feel now is a pretty good time to analyse Fortress Biotech, Inc.'s (NASDAQ:FBIO) business as it appears the company may be on the cusp of a considerable accomplishment. Fortress Biotech, Inc., a biopharmaceutical company, develops and commercializes pharmaceutical and biotechnology products. On 31 December 2021, the US$131m market-cap company posted a loss of US$65m for its most recent financial year. The most pressing concern for investors is Fortress Biotech's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Fortress Biotech

Consensus from 5 of the American Biotechs analysts is that Fortress Biotech is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$92m in 2024. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 54%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqCM:FBIO Earnings Per Share Growth April 9th 2022

Given this is a high-level overview, we won’t go into details of Fortress Biotech's upcoming projects, though, take into account that generally biotechs, 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 23% 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 Fortress Biotech to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fortress Biotech's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

  1. Historical Track Record: What has Fortress Biotech'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 Fortress Biotech'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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