ADMA Biologics, Inc.'s (NASDAQ:ADMA) Profit Outlook
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 company, engages in developing, manufacturing, and marketing specialty plasma-derived biologics for the treatment of immune deficiencies and infectious diseases in the United States and internationally. The US$902m market-cap company’s loss lessened since it announced a US$66m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$48m, as it approaches breakeven. The most pressing concern for investors is ADMA Biologics' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for ADMA Biologics
ADMA Biologics is bordering on breakeven, according to the 4 American Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$19m in 2024. The company is therefore projected 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 signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of ADMA Biologics' upcoming projects, but, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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. ADMA Biologics currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in ADMA Biologics' case is 99%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
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 key aspects you should further research:
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.
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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.
