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 people living with rare metabolic diseases. The US$2.7b market-cap company’s loss lessened since it announced a US$277m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$239m, as it approaches breakeven. The most pressing concern for investors is Amicus Therapeutics' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 9 industry analysts covering Amicus Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$52m in 2023. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% year-on-year, on average, which is extremely buoyant. 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, however, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one issue worth mentioning. Amicus Therapeutics currently has a debt-to-equity ratio of 103%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of Amicus Therapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Amicus Therapeutics, take a look at Amicus Therapeutics' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
- 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.
- 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.
- 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.
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.