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When Will Aridis Pharmaceuticals, Inc. (NASDAQ:ARDS) Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Aridis Pharmaceuticals, Inc.'s (NASDAQ:ARDS) future prospects. Aridis Pharmaceuticals, Inc., a late-stage biopharmaceutical company, focuses on the discovery and development of targeted immunotherapy using fully human monoclonal antibodies (mAb) to treat life-threatening infections. The US$15m market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$33m shrinking the gap between loss and breakeven. As path to profitability is the topic on Aridis Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Aridis Pharmaceuticals

According to the 3 industry analysts covering Aridis Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$7.3m in 2024. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 62% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Aridis Pharmaceuticals' growth isn’t the focus of this broad overview, however, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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Before we wrap up, there’s one issue worth mentioning. Aridis Pharmaceuticals currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Aridis Pharmaceuticals 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 Aridis Pharmaceuticals, take a look at Aridis Pharmaceuticals' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Historical Track Record: What has Aridis Pharmaceuticals' 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aridis Pharmaceuticals' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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