Loss-Making Puma Biotechnology, Inc. (NASDAQ:PBYI) Set To Breakeven

We feel now is a pretty good time to analyse Puma Biotechnology, Inc.'s (NASDAQ:PBYI) business as it appears the company may be on the cusp of a considerable accomplishment. Puma Biotechnology, Inc., a biopharmaceutical company, focuses on the development and commercialization of products to enhance cancer care in the United States and internationally. The company’s loss has recently broadened since it announced a US$29m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$34m, moving it further away from breakeven. Many investors are wondering about the rate at which Puma Biotechnology will turn a profit, with the big question being “when will the company breakeven?” 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 Puma Biotechnology

Puma Biotechnology 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$1.7m in 2022. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 6.3% year-on-year, on average, which is a somewhat cautious outlook. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.

Given this is a high-level overview, we won’t go into details of Puma Biotechnology's upcoming projects, however, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, periods of lower growth in the upcoming years 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. Puma Biotechnology currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Puma Biotechnology 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 Puma Biotechnology 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 Puma Biotechnology’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. 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.