Breakeven On The Horizon For Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX)
We feel now is a pretty good time to analyse Amylyx Pharmaceuticals, Inc.'s (NASDAQ:AMLX) business as it appears the company may be on the cusp of a considerable accomplishment. Amylyx Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, engages in developing various therapeutics for amyotrophic lateral sclerosis (ALS) and other neurodegenerative diseases. The US$2.3b market-cap company posted a loss in its most recent financial year of US$88m and a latest trailing-twelve-month loss of US$153m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Amylyx Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Amylyx Pharmaceuticals
According to the 4 industry analysts covering Amylyx Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$227m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 69%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Amylyx Pharmaceuticals given that this is a high-level summary, but, keep in mind that generally 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 we’d like to point out is that Amylyx Pharmaceuticals has no debt on its balance sheet, which is rare for a loss-making pharma, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Amylyx 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 Amylyx Pharmaceuticals, take a look at Amylyx Pharmaceuticals' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
Valuation: What is Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals’s board and the CEO’s background.
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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