Amicus Therapeutics, Inc. (NASDAQ:FOLD) About To Shift From Loss To Profit

We feel now is a pretty good time to analyse Amicus Therapeutics, Inc.'s (NASDAQ:FOLD) business as it appears the company may be on the cusp of a considerable accomplishment. Amicus Therapeutics, Inc., a biotechnology company, focuses on discovering, developing, and delivering medicines for rare diseases. The US$3.6b market-cap company’s loss lessened since it announced a US$237m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$174m, as it approaches breakeven. Many investors are wondering about the rate at which Amicus Therapeutics will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Amicus Therapeutics

Amicus Therapeutics is bordering on breakeven, according to the 11 American Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$18m in 2024. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 56% 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.

We're not going to go through company-specific developments for Amicus Therapeutics given that this is a high-level summary, though, keep in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Amicus Therapeutics is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Amicus Therapeutics 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 Amicus Therapeutics 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 Amicus Therapeutics’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.