Bausch Health Companies Inc. (NYSE:BHC) 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 Bausch Health Companies Inc.'s (NYSE:BHC) future prospects. Bausch Health Companies Inc. operates as a diversified specialty pharmaceutical and medical device company in the United States and internationally. The US$2.2b market-cap company posted a loss in its most recent financial year of US$592m and a latest trailing-twelve-month loss of US$471m shrinking the gap between loss and breakeven. The most pressing concern for investors is Bausch Health Companies' path to profitability – when will it breakeven? 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 Bausch Health Companies

Bausch Health Companies is bordering on breakeven, according to the 8 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$79m in 2024. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 119%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Bausch Health Companies' upcoming projects, however, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Bausch Health Companies 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Bausch Health Companies which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Bausch Health Companies, take a look at Bausch Health Companies' company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

1. Valuation: What is Bausch Health Companies 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 Bausch Health Companies 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 Bausch Health Companies’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.