Analysts Expect Breakeven For Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) Before Long

We feel now is a pretty good time to analyse Tarsus Pharmaceuticals, Inc.'s (NASDAQ:TARS) business as it appears the company may be on the cusp of a considerable accomplishment. Tarsus Pharmaceuticals, Inc., a commercial stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutic candidates for eye care in the United States. The US$2.0b market-cap company posted a loss in its most recent financial year of US$136m and a latest trailing-twelve-month loss of US$134m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Tarsus Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Tarsus Pharmaceuticals

Tarsus Pharmaceuticals is bordering on breakeven, according to the 7 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$101m in 2026. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 55%, which is rather optimistic! 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 Tarsus Pharmaceuticals given that this is a high-level summary, though, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 30% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Tarsus Pharmaceuticals' 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 Tarsus Pharmaceuticals' 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.