SpringWorks Therapeutics, Inc. (NASDAQ:SWTX): Is Breakeven Near?

We feel now is a pretty good time to analyse SpringWorks Therapeutics, Inc.'s (NASDAQ:SWTX) business as it appears the company may be on the cusp of a considerable accomplishment. SpringWorks Therapeutics, Inc., a commercial-stage biopharmaceutical company, engages in the development and commercialization of medicines for underserved patient populations suffering from rare diseases and cancer. With the latest financial year loss of US$325m and a trailing-twelve-month loss of US$339m, the US$2.5b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is SpringWorks Therapeutics' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for SpringWorks Therapeutics

According to the 7 industry analysts covering SpringWorks Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$27m in 2026. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 57% 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.

Given this is a high-level overview, we won’t go into details of SpringWorks Therapeutics' upcoming projects, but, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that SpringWorks Therapeutics 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. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of SpringWorks Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – SpringWorks Therapeutics' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. Historical Track Record: What has SpringWorks Therapeutics' 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SpringWorks Therapeutics' 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.

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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.