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

With the business potentially at an important milestone, we thought we'd take a closer look at Outlook Therapeutics, Inc.'s (NASDAQ:OTLK) future prospects. Outlook Therapeutics, Inc., operates as a clinical-stage biopharmaceutical company, focuses on developing and commercializing monoclonal antibodies for various ophthalmic indications. The company’s loss has recently broadened since it announced a US$59m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$94m, moving it further away from breakeven. As path to profitability is the topic on Outlook Therapeutics' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Outlook Therapeutics

According to the 7 industry analysts covering Outlook Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$95m in 2027. Therefore, the company is expected to breakeven roughly 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 56%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Outlook Therapeutics' growth isn’t the focus of this broad overview, but, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Outlook Therapeutics is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

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 pertinent factors you should further research:

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. 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.