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When Can We Expect A Profit From MannKind Corporation (NASDAQ:MNKD)?

With the business potentially at an important milestone, we thought we'd take a closer look at MannKind Corporation's (NASDAQ:MNKD) future prospects. MannKind Corporation, a biopharmaceutical company, focuses on the development and commercialization of inhaled therapeutic products for endocrine and orphan lung diseases in the United States. The company’s loss has recently broadened since it announced a US$81m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$88m, moving it further away from breakeven. The most pressing concern for investors is MannKind's path to profitability – when will it breakeven? 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 MannKind

According to the 6 industry analysts covering MannKind, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$39m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. 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 71%, 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

We're not going to go through company-specific developments for MannKind given that this is a high-level summary, but, bear in mind that by and large 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.

Before we wrap up, there’s one issue worth mentioning. MannKind 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of MannKind to cover in one brief article, but the key fundamentals for the company can all be found in one place – MannKind's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

  1. Valuation: What is MannKind 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 MannKind 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 MannKind’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.

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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