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When Will ADMA Biologics Inc (NASDAQ:ADMA) Turn A Profit?

Frank Brewer

ADMA Biologics Inc’s (NASDAQ:ADMA): ADMA Biologics, Inc., a biopharmaceutical company, develops, manufactures, and markets specialty plasma-based biologics for the treatment of immune deficiencies and infectious diseases. On 31 December 2017, the US$196.22M market-cap posted a loss of -US$43.76M for its most recent financial year. As path to profitability is the topic on ADMA’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for ADMA.

Check out our latest analysis for ADMA Biologics

According to the industry analysts covering ADMA, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$3.18M in 2020. So, ADMA is predicted to breakeven approximately 2 years from today. What rate will ADMA have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 62.83%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:ADMA Past Future Earnings Mar 12th 18

Given this is a high-level overview, I won’t go into detail the detail of ADMA’s upcoming projects, though, take into account that by and large 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.

Before I wrap up, there’s one issue worth mentioning. ADMA currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ADMA’s case is 99.70%. 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 to cover in one brief article, but the key fundamentals for the company can all be found in one place – ADMA’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:

  1. Valuation: What is ADMA 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 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 ADMA Biologics’s board and the CEO’s back ground.
  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.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.