Ra Pharmaceuticals Inc’s (NASDAQ:RARX): Ra Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops therapeutics for the treatment of diseases caused by excessive or uncontrolled activation of the complement system in the United States. With the latest financial year loss of -US$54.44m and a trailing-twelve month of -US$59.58m, the US$310.92m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is RARX’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for RARX’s growth and when analysts expect the company to become profitable.Check out our latest analysis for Ra Pharmaceuticals
RARX is bordering on breakeven, according to Biotechs analysts. They expect the company to post a final loss in -1, before turning a profit of US$0 in . RARX is therefore projected to breakeven around a few months from now. What rate will RARX have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 0.43%, which is a somewhat cautious outlook. If this rate turns out to be too low, RARX may become profitable faster than analysts expect.
Given this is a high-level overview, I won’t go into details of RARX’s upcoming projects, but, bear in mind that typically 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 low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.
Before I wrap up, there’s one aspect worth mentioning. RARX currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. RARX currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are key fundamentals of RARX 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 RARX, take a look at RARX’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:
- Historical Track Record: What has RARX’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ra Pharmaceuticals’s board and the CEO’s back ground.
- 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.