Zynerba Pharmaceuticals Inc’s (NASDAQ:ZYNE): Zynerba Pharmaceuticals, Inc. operates as a clinical stage specialty pharmaceutical company. With the latest financial year loss of -US$32.0m and a trailing-twelve month of -US$40.2m, the US$95m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is ZYNE’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for ZYNE, its year of breakeven and its implied growth rate.
According to the industry analysts covering ZYNE, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$33m in 2021. So, ZYNE is predicted to breakeven approximately a couple of months from now! What rate will ZYNE have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 57%, which is extremely buoyant. If this rate turns out to be too aggressive, ZYNE may become profitable much later than analysts predict.
Underlying developments driving ZYNE’s growth isn’t the focus of this broad overview, however, keep in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that ZYNE has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which typically has high debt relative to its equity. ZYNE currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of ZYNE to cover in one brief article, but the key fundamentals for the company can all be found in one place – ZYNE’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:
- Historical Track Record: What has ZYNE’s 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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Zynerba Pharmaceuticals’s board and the CEO’s back ground.
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.