Stock Analysis

Analysts Expect Breakeven For Pardes Biosciences, Inc. (NASDAQ:PRDS) Before Long

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Pardes Biosciences, Inc. (NASDAQ:PRDS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Pardes Biosciences, Inc., a clinical stage biopharmaceutical company, focuses on discovering, developing, and commercializing novel therapeutics to improve the lives of patients suffering from life-threatening disease. The company’s loss has recently broadened since it announced a US$39m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$87m, moving it further away from breakeven. The most pressing concern for investors is Pardes Biosciences' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Pardes Biosciences

Pardes Biosciences is bordering on breakeven, according to the 3 American Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$78m in 2024. So, the company is predicted to breakeven just over a year 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 72%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:PRDS Earnings Per Share Growth March 14th 2023

Underlying developments driving Pardes Biosciences' growth isn’t the focus of this broad overview, though, keep 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Pardes Biosciences has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Pardes Biosciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Pardes Biosciences' 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 Pardes Biosciences' 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 Pardes Biosciences' 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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