When Will Ocugen, Inc. (NASDAQ:OCGN) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Ocugen, Inc.'s (NASDAQ:OCGN) future prospects. Ocugen, Inc., a clinical-stage biopharmaceutical company, focuses on the developing gene therapies to cure blindness diseases. With the latest financial year loss of US$34m and a trailing-twelve-month loss of US$38m, the US$1.7b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Ocugen's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Ocugen

Ocugen is bordering on breakeven, according to the 4 American Biotechs analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$118m in 2022. So, the company is predicted to breakeven just over a year from now. 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 30% is expected, 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 Ocugen 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 4.5% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Ocugen to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ocugen's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is Ocugen 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 Ocugen 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 Ocugen’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. 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.
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