Market Sentiment Around Loss-Making KalVista Pharmaceuticals, Inc. (NASDAQ:KALV)

With the business potentially at an important milestone, we thought we'd take a closer look at KalVista Pharmaceuticals, Inc.'s (NASDAQ:KALV) future prospects. KalVista Pharmaceuticals, Inc., a clinical stage pharmaceutical company, engages in the discovery, development, and commercialization of small molecule protease inhibitors for diseases with unmet needs in the United States. With the latest financial year loss of US$93m and a trailing-twelve-month loss of US$108m, the US$512m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which KalVista 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.

Check out our latest analysis for KalVista Pharmaceuticals

KalVista Pharmaceuticals is bordering on breakeven, according to the 5 American Biotechs analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$28m in 2027. The company is therefore projected to breakeven around 3 years from today. 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 60% is expected, which signals high confidence from analysts. 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 KalVista Pharmaceuticals given that this is a high-level summary, but, bear 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. KalVista Pharmaceuticals currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on KalVista Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at KalVista Pharmaceuticals' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Valuation: What is KalVista 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 KalVista 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 KalVista 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.