When Will Heron Therapeutics, Inc. (NASDAQ:HRTX) Breakeven?

Heron Therapeutics, Inc. (NASDAQ:HRTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Heron Therapeutics, Inc., a commercial-stage biotechnology company, engages in developing and commercializing therapeutic that enhances medical care. The US$305m market-cap company’s loss lessened since it announced a US$14m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$7.8m, as it approaches breakeven. 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?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Consensus from 4 of the American Biotechs analysts is that Heron Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$14m in 2026. 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 57% year-on-year, on average, which is extremely buoyant. 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 Heron Therapeutics' upcoming projects, but, 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.

See our latest analysis for Heron Therapeutics

Before we wrap up, there’s one issue worth mentioning. Heron Therapeutics 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Heron 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 Heron Therapeutics, take a look at Heron Therapeutics' company page on Simply Wall St. We've also compiled a list of key aspects 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.