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When Will AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX) Become Profitable?

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AcelRx Pharmaceuticals, Inc. (NASDAQ:ACRX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. AcelRx Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on the development and commercialization of therapies for the treatment of acute pain. With the latest financial year loss of US$53m and a trailing-twelve-month loss of US$46m, the US$263m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which AcelRx Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for AcelRx Pharmaceuticals

According to the 4 industry analysts covering AcelRx Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$11m in 2022. Therefore, the company is expected to breakeven just over a year 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 61% is expected, 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 AcelRx Pharmaceuticals' upcoming projects, but, take into account that by and large pharmaceuticals, 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. AcelRx 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of AcelRx 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 AcelRx Pharmaceuticals, take a look at AcelRx Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

  1. Historical Track Record: What has AcelRx Pharmaceuticals' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AcelRx Pharmaceuticals' 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. 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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