Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK): Are Analysts Optimistic?

Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Paratek Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization life-saving therapies for life-threatening diseases or other public health threats for civilian, government, and military use. The US$341m market-cap company announced a latest loss of US$97m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on Paratek Pharmaceuticals' 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.

Check out our latest analysis for Paratek Pharmaceuticals

Consensus from 4 of the American Pharmaceuticals analysts is that Paratek Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$7.0m in 2022. Therefore, the company is expected 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 71%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Paratek Pharmaceuticals' growth isn’t the focus of this broad overview, but, take into account that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. Paratek Pharmaceuticals 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Paratek Pharmaceuticals 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 Paratek Pharmaceuticals, take a look at Paratek Pharmaceuticals' company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Historical Track Record: What has Paratek Pharmaceuticals' 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 Paratek Pharmaceuticals' 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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