Yahoo Finance Allergan plc (NYSE:AGN): When Will It Breakeven?
Allergan plc’s (NYSE:AGN): Allergan plc, a specialty pharmaceutical company, develops, manufactures, markets, and distributes medical aesthetics, biosimilar, and over-the-counter pharmaceutical products worldwide. The US$51.26B market-cap posted a loss in its most recent financial year of -US$4.00B and a latest trailing-twelve-month loss of -US$1.70B shrinking the gap between loss and breakeven. Many investors are wondering the rate at which AGN will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for AGN.
See our latest analysis for Allergan
AGN is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2019, before turning a profit of US$1.26B in 2020. AGN is therefore projected to breakeven around 2 years from now. What rate will AGN 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 64.22%, which signals high confidence from analysts. If this rate turns out to be too aggressive, AGN may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of AGN’s upcoming projects, though, keep in mind 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.
One thing I’d like to point out is that AGN has managed its capital judiciously, with debt making up 36.72% of equity. This means that AGN has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of AGN to cover in one brief article, but the key fundamentals for the company can all be found in one place – AGN’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further examine:
Valuation: What is AGN 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 AGN is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Allergan’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 pass 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.
