OptiNose, Inc.'s (NASDAQ:OPTN): OptiNose, Inc., a specialty pharmaceutical company, focuses on the development and commercialization of products for patients treated by ear, nose, and throat; and allergy specialists in the United States. With the latest financial year loss of US$110.1m and a trailing-twelve month loss of US$108.5m, the US$305m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on OPTN’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for OPTN’s growth and when analysts expect the company to become profitable.
OPTN is bordering on breakeven, according to the 6 Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$18m in 2022. OPTN is therefore projected to breakeven around 2 years from today. How fast will OPTN have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 71% 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.
I’m not going to go through company-specific developments for OPTN given that this is a high-level summary, though, take into account that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one issue worth mentioning. OPTN currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in OPTN’s case, it has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of OPTN which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at OPTN, take a look at OPTN’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further examine:
- Valuation: What is OPTN 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 OPTN is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on OptiNose’s board and the CEO’s back ground.
- 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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