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Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT): Are Analysts Optimistic?

·3-min read

With the business potentially at an important milestone, we thought we'd take a closer look at Intercept Pharmaceuticals, Inc.'s (NASDAQ:ICPT) future prospects. Intercept Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapeutics to treat progressive non-viral liver diseases in the United States, Europe, and Canada. With the latest financial year loss of US$91m and a trailing-twelve-month loss of US$68m, the US$402m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Intercept Pharmaceuticals' 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 Intercept Pharmaceuticals

Consensus from 16 of the American Biotechs analysts is that Intercept Pharmaceuticals is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$44m in 2024. Therefore, the company is expected to breakeven roughly 2 years 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 74% is expected, which signals high confidence from analysts. 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

Given this is a high-level overview, we won’t go into details of Intercept Pharmaceuticals' upcoming projects, but, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Intercept Pharmaceuticals 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

  1. Valuation: What is Intercept 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 Intercept Pharmaceuticals 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 Intercept Pharmaceuticals’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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