Syneos Health Inc’s (NASDAQ:SYNH): Syneos Health, Inc. operates as an integrated biopharmaceutical solutions company in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. The US$4.53B market-cap company announced a latest loss of -US$138.47M on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which SYNH will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for SYNH.See our latest analysis for Syneos Health
According to the industry analysts covering SYNH, breakeven is near. They expect the company to post a final loss in 2017, before turning a profit of US$69.87M in 2018. SYNH is therefore projected to breakeven around a few months from now. How fast will SYNH have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 84.03% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving SYNH’s growth isn’t the focus of this broad overview, however, keep in mind that by and large life science companies, 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 I would like to bring into light with SYNH is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in SYNH’s case is 99.51%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on SYNH, so if you are interested in understanding the company at a deeper level, take a look at SYNH’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:
- Valuation: What is SYNH 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 SYNH 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 Syneos Health’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.