Analysts Expect Breakeven For Iterum Therapeutics plc (NASDAQ:ITRM) Before Long

Iterum Therapeutics plc (NASDAQ:ITRM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Iterum Therapeutics plc, a pharmaceutical company, develops and commercializes treatments for drug resistant bacterial infections in Ireland, Bermuda, and the United States. The US$29m market-cap company’s loss lessened since it announced a US$25m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$24m, as it approaches breakeven. The most pressing concern for investors is Iterum 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.

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Iterum Therapeutics is bordering on breakeven, according to the 2 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$12m in 2027. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, 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 Iterum Therapeutics given that this is a high-level summary, though, bear in mind that generally pharmaceuticals, 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.

See our latest analysis for Iterum Therapeutics

Before we wrap up, there’s one issue worth mentioning. Iterum 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Iterum 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 Iterum Therapeutics, take a look at Iterum Therapeutics' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Historical Track Record: What has Iterum Therapeutics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Iterum Therapeutics' 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.