Esperion Therapeutics, Inc. (NASDAQ:ESPR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Esperion Therapeutics, Inc., a pharmaceutical company, develops and commercializes medicines for the treatment of patients with elevated low-density lipoprotein cholesterol in the United States and internationally. The US$301m market-cap company posted a loss in its most recent financial year of US$144m and a latest trailing-twelve-month loss of US$308m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Esperion Therapeutics' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 11 industry analysts covering Esperion Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$53m in 2023. The company is therefore projected to breakeven around 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 68%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Esperion Therapeutics' upcoming projects, though, bear in mind that typically 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 would like to bring into light with Esperion Therapeutics 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
This article is not intended to be a comprehensive analysis on Esperion Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Esperion Therapeutics' company page on Simply Wall St. We've also put together a list of important factors you should further research:
Valuation: What is Esperion Therapeutics 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 Esperion Therapeutics 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 Esperion Therapeutics’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.
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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