Zevra Therapeutics, Inc. (NASDAQ:ZVRA) Could Be Less Than A Year Away From Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Zevra Therapeutics, Inc.'s (NASDAQ:ZVRA) future prospects. Zevra Therapeutics, Inc., a commercial-stage company, focuses on addressing unmet needs for the treatment of rare diseases in the United States. On 31 December 2024, the US$418m market-cap company posted a loss of US$106m for its most recent financial year. Many investors are wondering about the rate at which Zevra Therapeutics 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.

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Zevra Therapeutics is bordering on breakeven, according to the 8 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$14m in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 57% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Zevra Therapeutics' upcoming projects, but, bear in mind that typically pharmaceuticals, 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.

Check out our latest analysis for Zevra Therapeutics

One thing we would like to bring into light with Zevra Therapeutics is its debt-to-equity ratio of 150%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Zevra Therapeutics 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 Zevra Therapeutics 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 Zevra Therapeutics’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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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.