Analysts Expect Breakeven For Alvotech (NASDAQ:ALVO) Before Long
Alvotech (NASDAQ:ALVO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Alvotech, through its subsidiaries, develops and manufactures biosimilar medicines for patients worldwide. On 31 December 2023, the US$4.0b market-cap company posted a loss of US$552m for its most recent financial year. Many investors are wondering about the rate at which Alvotech 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.
Check out our latest analysis for Alvotech
Alvotech is bordering on breakeven, according to the 5 American Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$125m in 2025. Therefore, the company is expected to breakeven just over a year from now. 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 89% is expected, 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 Alvotech's upcoming projects, though, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we would like to bring into light with Alvotech is it 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are key fundamentals of Alvotech 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 Alvotech, take a look at Alvotech's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Valuation: What is Alvotech 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 Alvotech 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 Alvotech’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.
