When Will Alimera Sciences, Inc. (NASDAQ:ALIM) Breakeven?
Alimera Sciences, Inc. (NASDAQ:ALIM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Alimera Sciences, Inc., a pharmaceutical company, engages in the development and commercialization of ophthalmic pharmaceuticals in the United States and internationally. On 31 December 2022, the US$15m market-cap company posted a loss of US$18m for its most recent financial year. Many investors are wondering about the rate at which Alimera Sciences will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Alimera Sciences
Alimera Sciences is bordering on breakeven, according to the 3 American Pharmaceuticals analysts. They expect the company to post a final loss in 2023, before turning a profit of US$1.6m in 2024. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 125% year-on-year, on average, which is extremely buoyant. 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 Alimera Sciences' upcoming projects, but, bear in mind that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. 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. Alimera Sciences currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are key fundamentals of Alimera Sciences 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 Alimera Sciences, take a look at Alimera Sciences' company page on Simply Wall St. We've also put together a list of key factors you should look at:
Historical Track Record: What has Alimera Sciences' 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 Alimera Sciences' 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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