Heron Therapeutics, Inc.'s (NASDAQ:HRTX) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Heron Therapeutics, Inc.'s (NASDAQ:HRTX) future prospects. Heron Therapeutics, Inc., a commercial-stage biotechnology company, engages in developing and commercializing therapeutic that enhances medical care. On 31 December 2024, the US$335m market-cap company posted a loss of US$14m for its most recent financial year. Many investors are wondering about the rate at which Heron Therapeutics 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.

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Heron Therapeutics is bordering on breakeven, according to the 3 American Biotechs analysts. They expect the company to post a final loss in 2025, before turning a profit of US$10m in 2026. The company is therefore projected to breakeven just over a year 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 57% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Heron Therapeutics' upcoming projects, however, keep in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Check out our latest analysis for Heron Therapeutics

One thing we would like to bring into light with Heron Therapeutics is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are too many aspects of Heron Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Heron Therapeutics' company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Valuation: What is Heron 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 Heron 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 Heron 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.