Affimed NV. (NASDAQ:AFMD): When Will It Breakeven?
Affimed NV.’s (NASDAQ:AFMD): Affimed N.V., a clinical-stage biopharmaceutical company, focuses on discovering and developing cancer immunotherapies in Germany and internationally. The US$139.53M market-cap posted a loss in its most recent financial year of -€32.22M and a latest trailing-twelve-month loss of -€29.22M shrinking the gap between loss and breakeven. The most pressing concern for investors is AFMD’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for AFMD.
See our latest analysis for Affimed
According to the industry analysts covering AFMD, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €37.80M in 2021. Therefore, AFMD is expected to breakeven roughly 3 years from today. What rate will AFMD 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 47.92%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for AFMD given that this is a high-level summary, however, 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.
One thing I’d like to point out is that AFMD has managed its capital judiciously, with debt making up 21.24% of equity. This means that AFMD has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of AFMD to cover in one brief article, but the key fundamentals for the company can all be found in one place – AFMD’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:
Historical Track Record: What has AFMD’s 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Affimed’s board and the CEO’s back ground.
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.
