Market Sentiment Around Loss-Making scPharmaceuticals Inc. (NASDAQ:SCPH)

We feel now is a pretty good time to analyse scPharmaceuticals Inc.'s (NASDAQ:SCPH) business as it appears the company may be on the cusp of a considerable accomplishment. scPharmaceuticals Inc., a pharmaceutical company, focuses on developing and commercializing products to optimize the delivery of infused therapies and patient care. The company’s loss has recently broadened since it announced a US$85m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$91m, moving it further away from breakeven. Many investors are wondering about the rate at which scPharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Consensus from 6 of the American Pharmaceuticals analysts is that scPharmaceuticals is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$43m in 2027. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for scPharmaceuticals given that this is a high-level summary, however, keep in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Check out our latest analysis for scPharmaceuticals

One thing we would like to bring into light with scPharmaceuticals is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on scPharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at scPharmaceuticals' company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Valuation: What is scPharmaceuticals 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 scPharmaceuticals 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 scPharmaceuticals’s board and the CEO’s background.
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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.