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Vaxart, Inc.'s (NASDAQ:VXRT) Shift From Loss To Profit

·3-min read

Vaxart, Inc. (NASDAQ:VXRT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Vaxart, Inc., a clinical-stage biotechnology company, engages in the discovery and development of oral recombinant protein vaccines based on its proprietary oral vaccine platform. With the latest financial year loss of US$32m and a trailing-twelve-month loss of US$54m, the US$1.0b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Vaxart's investors mind, we've decided to gauge market sentiment. 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 Vaxart

Consensus from 4 of the American Biotechs analysts is that Vaxart is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$6.4m in 2023. 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 77%, 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

Given this is a high-level overview, we won’t go into details of Vaxart's upcoming projects, however, keep 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.

One thing we’d like to point out is that Vaxart has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Vaxart, so if you are interested in understanding the company at a deeper level, take a look at Vaxart's company page on Simply Wall St. We've also compiled a list of key factors you should look at:

  1. Valuation: What is Vaxart 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 Vaxart 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 Vaxart’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.

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.

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

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