Tarsus Pharmaceuticals, Inc.'s (NASDAQ:TARS) Path To Profitability

Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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. With the latest financial year loss of US$136m and a trailing-twelve-month loss of US$150m, the US$1.3b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Tarsus Pharmaceuticals' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Tarsus Pharmaceuticals

Consensus from 6 of the American Pharmaceuticals analysts is that Tarsus Pharmaceuticals is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$96m in 2026. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 65% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Tarsus Pharmaceuticals' growth isn’t the focus of this broad overview, however, bear in mind that generally pharmaceuticals, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 28% 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:

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

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.