When Will Protagonist Therapeutics Inc (NASDAQ:PTGX) Become Profitable?

Protagonist Therapeutics Inc’s (NASDAQ:PTGX): Protagonist Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing peptide-based drugs to address various unmet medical needs. With the latest financial year loss of -US$37.0m and a trailing-twelve month of -US$28.1m, the US$202m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is PTGX’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for PTGX.

View our latest analysis for Protagonist Therapeutics

Expectation from Biotechs analysts is PTGX is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$107m in 2021. Therefore, PTGX is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which PTGX must grow year-on-year. It turns out an average annual growth rate of 4.7% is expected, which is a somewhat cautious outlook. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.

NasdaqGM:PTGX Past Future Earnings November 15th 18
NasdaqGM:PTGX Past Future Earnings November 15th 18

Underlying developments driving PTGX’s growth isn’t the focus of this broad overview, however, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. 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 I wrap up, there’s one aspect worth mentioning. PTGX currently 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 PTGX 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 key fundamentals of PTGX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at PTGX, take a look at PTGX’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should look at:

  1. Historical Track Record: What has PTGX’s 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 Protagonist Therapeutics’s board and the CEO’s back ground.
  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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.