Bausch Health Companies Inc. (NYSE:BHC) Is About To Turn The Corner

We feel now is a pretty good time to analyse Bausch Health Companies Inc.'s (NYSE:BHC) business as it appears the company may be on the cusp of a considerable accomplishment. Bausch Health Companies Inc. operates as a diversified specialty pharmaceutical and medical device company in the United States and internationally. The US$3.2b market-cap company announced a latest loss of US$592m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Bausch Health Companies' investors mind, we've decided to gauge market sentiment. 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 Bausch Health Companies

According to the 6 industry analysts covering Bausch Health Companies, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$336m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 88% year-on-year, on average, 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.

Underlying developments driving Bausch Health Companies' growth isn’t the focus of this broad overview, but, 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 Bausch Health Companies 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 Bausch Health Companies, so if you are interested in understanding the company at a deeper level, take a look at Bausch Health Companies' company page on Simply Wall St. We've also put together a list of pertinent factors 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.