Stock Analysis

Loss-Making UroGen Pharma Ltd. (NASDAQ:URGN) Expected To Breakeven In The Medium-Term

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NasdaqGM:URGN
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UroGen Pharma Ltd. (NASDAQ:URGN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. UroGen Pharma Ltd., a clinical stage biopharmaceutical company, focuses on developing solutions for specialty cancers and urologic diseases. The US$507m market-cap company posted a loss in its most recent financial year of US$105m and a latest trailing-twelve-month loss of US$137m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which UroGen Pharma will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for UroGen Pharma

According to the 8 industry analysts covering UroGen Pharma, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$28m in 2023. So, the company is predicted to breakeven approximately 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 59% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqGM:URGN Earnings Per Share Growth January 26th 2021

Underlying developments driving UroGen Pharma's growth isn’t the focus of this broad overview, but, keep in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. 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 UroGen Pharma has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

  1. Valuation: What is UroGen Pharma 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 UroGen Pharma 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 UroGen Pharma’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.

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