Outlook Therapeutics, Inc. (NASDAQ:OTLK): Are Analysts Optimistic?

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., a late clinical-stage biopharmaceutical company, focuses on developing and commercializing monoclonal antibodies for various ophthalmic indications. With the latest financial year loss of US$66m and a trailing-twelve-month loss of US$57m, the US$347m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Outlook Therapeutics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Outlook Therapeutics

According to the 7 industry analysts covering Outlook Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$124m in 2025. So, the company is predicted to breakeven approximately 2 years from today. 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 71%, which is extremely buoyant. 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 Outlook Therapeutics' upcoming projects, but, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Outlook Therapeutics currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Outlook Therapeutics 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 Outlook Therapeutics 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 Outlook Therapeutics’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.