Sage Therapeutics Inc (NASDAQ:SAGE): Is Breakeven Near?

Sage Therapeutics Inc’s (NASDAQ:SAGE): Sage Therapeutics, Inc., a clinical-stage biopharmaceutical company, develops and commercializes novel medicines to treat central nervous system disorders. The company’s loss has recently broadened since it announced a -US$270.12m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$287.94m, moving it further away from breakeven. Many investors are wondering the rate at which SAGE will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for SAGE, its year of breakeven and its implied growth rate.

See our latest analysis for Sage Therapeutics

Expectation from Biotechs analysts is SAGE is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$372.76m in 2022. So, SAGE is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which SAGE must grow year-on-year. It turns out an average annual growth rate of 39.72% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:SAGE Past Future Earnings June 8th 18
NasdaqGM:SAGE Past Future Earnings June 8th 18

Given this is a high-level overview, I won’t go into details of SAGE’s upcoming projects, however, 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before I wrap up, there’s one aspect worth mentioning. SAGE currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. SAGE currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of SAGE to cover in one brief article, but the key fundamentals for the company can all be found in one place – SAGE’s company page on Simply Wall St. I’ve also compiled a list of key factors you should look at:

  1. Valuation: What is SAGE 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 SAGE is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sage 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.