When Can We Expect A Profit From Liquidia Corporation (NASDAQ:LQDA)?

Liquidia Corporation (NASDAQ:LQDA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Liquidia Corporation, a biopharmaceutical company, develops, manufactures, and commercializes various products for unmet patient needs in the United States. With the latest financial year loss of US$130m and a trailing-twelve-month loss of US$139m, the US$1.2b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Liquidia's 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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Liquidia is bordering on breakeven, according to the 9 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$68m in 2027. So, the company is predicted to breakeven approximately 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 66% year-on-year, on average, which is rather optimistic! 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 Liquidia's upcoming projects, however, keep in mind that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

View our latest analysis for Liquidia

One thing we would like to bring into light with Liquidia is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Liquidia 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 Liquidia, take a look at Liquidia's company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Liquidia 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 Liquidia 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 Liquidia’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.