Breakeven On The Horizon For Outlook Therapeutics, Inc. (NASDAQ:OTLK)

Outlook Therapeutics, Inc. (NASDAQ:OTLK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Outlook Therapeutics, Inc., a late clinical-stage biopharmaceutical company, focuses on developing and commercializing monoclonal antibodies for various ophthalmic indications. The US$430m market-cap company’s loss lessened since it announced a US$49m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$45m, as it approaches breakeven. Many investors are wondering about the rate at which Outlook Therapeutics will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Outlook Therapeutics

According to the 4 industry analysts covering Outlook Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$58m in 2023. Therefore, the company is expected to breakeven roughly 2 years 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 68% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Outlook Therapeutics' upcoming projects, 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 would like to bring into light with Outlook Therapeutics is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Outlook 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 Outlook Therapeutics, take a look at Outlook Therapeutics' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Historical Track Record: What has Outlook 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 Outlook 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. 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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