When Will ADMA Biologics, Inc. (NASDAQ:ADMA) Become Profitable?
With the business potentially at an important milestone, we thought we'd take a closer look at ADMA Biologics, Inc.'s (NASDAQ:ADMA) future prospects. ADMA Biologics, Inc., a biopharmaceutical and specialty immunoglobulin company, develops, manufactures, and markets specialty plasma-derived biologics for the treatment of immune deficiencies and infectious diseases in the United States. The US$251m market-cap company posted a loss in its most recent financial year of US$48m and a latest trailing-twelve-month loss of US$67m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on ADMA Biologics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for ADMA Biologics
ADMA Biologics is bordering on breakeven, according to the 5 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$12m in 2023. So, the company is predicted to breakeven approximately 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 61%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of ADMA Biologics' upcoming projects, however, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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 ADMA Biologics is its debt-to-equity ratio of 136%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of ADMA Biologics to cover in one brief article, but the key fundamentals for the company can all be found in one place – ADMA Biologics' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
Valuation: What is ADMA Biologics 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 ADMA Biologics 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 ADMA Biologics’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. 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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