Soleno Therapeutics Inc’s (NASDAQ:SLNO): Soleno Therapeutics, Inc. focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. With the latest financial year loss of -US$12.07M and a trailing-twelve month of -US$13.27M, the US$40.79M market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is SLNO’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for SLNO’s growth and when analysts expect the company to become profitable.Check out our latest analysis for Soleno Therapeutics
According to the industry analysts covering SLNO, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$10.34M in 2022. So, SLNO is predicted to breakeven approximately 4 years from today. How fast will SLNO have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 34.37% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for SLNO given that this is a high-level summary, but, take into account 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 high growth rate is not unusual, especially if the company is currently in an investment period.
One thing I’d like to point out is that SLNO 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. SLNO currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on SLNO, so if you are interested in understanding the company at a deeper level, take a look at SLNO’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further research:
- Historical Track Record: What has SLNO’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 Soleno 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.