Revance Therapeutics Inc’s (NASDAQ:RVNC): Revance Therapeutics, Inc., a biotechnology company, engages in the development, manufacturing, and commercialization of novel botulinum toxin products for various aesthetic and therapeutic indications. The company’s loss has recently broadened since it announced a -US$120.59m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$128.47m, moving it further away from breakeven. Many investors are wondering the rate at which RVNC will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for RVNC’s growth and when analysts expect the company to become profitable.View out our latest analysis for Revance Therapeutics
According to the industry analysts covering RVNC, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$11.59m in 2022. Therefore, RVNC is expected to breakeven roughly a few months from now. What rate will RVNC 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 28.23%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of RVNC’s upcoming projects, though, bear in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that RVNC has managed its capital prudently, with debt making up 0.42% of equity. This means that RVNC has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on RVNC, so if you are interested in understanding the company at a deeper level, take a look at RVNC’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further research:
- Valuation: What is RVNC 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 RVNC 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 Revance Therapeutics’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.