TherapeuticsMD, Inc. (NASDAQ:TXMD): Are Analysts Optimistic?

TherapeuticsMD, Inc. (NASDAQ:TXMD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. TherapeuticsMD, Inc. operates as a women’s healthcare company in the United States. The US$624m market-cap company posted a loss in its most recent financial year of US$176m and a latest trailing-twelve-month loss of US$191m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which TherapeuticsMD 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.

Check out our latest analysis for TherapeuticsMD

According to the 6 industry analysts covering TherapeuticsMD, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$75m in 2023. The company is therefore projected to breakeven around 2 years from now. 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 61% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for TherapeuticsMD given that this is a high-level summary, however, take into account that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with TherapeuticsMD is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on TherapeuticsMD, so if you are interested in understanding the company at a deeper level, take a look at TherapeuticsMD's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Valuation: What is TherapeuticsMD 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 TherapeuticsMD is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TherapeuticsMD’s 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.

If you decide to trade TherapeuticsMD, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.