We feel now is a pretty good time to analyse uniQure N.V.'s (NASDAQ:QURE) business as it appears the company may be on the cusp of a considerable accomplishment. uniQure N.V., a gene therapy company, engages in the development of treatments for patients suffering from genetic and other devastating diseases. On 31 December 2020, the US$1.5b market-cap company posted a loss of US$125m for its most recent financial year. The most pressing concern for investors is uniQure's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 14 of the American Biotechs analysts is that uniQure is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$11m in 2021. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 13% is expected, which seems relatively fair. However, if this rate turns out to be too buoyant, the company may become profitable later than analysts predict.
We're not going to go through company-specific developments for uniQure given that this is a high-level summary, 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. So, a double-digit 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 15% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of uniQure to cover in one brief article, but the key fundamentals for the company can all be found in one place – uniQure's company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:
- Valuation: What is uniQure 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 uniQure is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on uniQure’s board and the CEO’s background.
- 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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What are the risks and opportunities for uniQure?
Trading at 89.1% below our estimate of its fair value
Revenue is forecast to grow 37.82% per year
Significant insider selling over the past 3 months
Currently unprofitable and not forecast to become profitable over the next 3 years
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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