Impel Pharmaceuticals Inc.'s (NASDAQ:IMPL) Profit Outlook

Impel Pharmaceuticals Inc. (NASDAQ:IMPL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Impel Pharmaceuticals Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of therapies for patients suffering from central nervous system disease in the United States. The US$5.3m market-cap company posted a loss in its most recent financial year of US$106m and a latest trailing-twelve-month loss of US$92m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Impel Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Impel Pharmaceuticals

Expectations from some of the American Biotechs analysts is that Impel Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$26m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. 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 67%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Impel Pharmaceuticals given that this is a high-level summary, but, keep 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. Impel Pharmaceuticals 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 key fundamentals of Impel Pharmaceuticals 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 Impel Pharmaceuticals, take a look at Impel Pharmaceuticals' company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is Impel Pharmaceuticals 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 Impel Pharmaceuticals 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 Impel Pharmaceuticals’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.