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Neuren Pharmaceuticals Limited (ASX:NEU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Neuren Pharmaceuticals Limited, a biopharmaceutical company, develops drugs for the treatment of neurological disorders. The AU$664m market-cap company announced a latest loss of AU$7.8m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Neuren Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 4 industry analysts covering Neuren Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$69m in 2023. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 39%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Neuren Pharmaceuticals' growth isn’t the focus of this broad overview, though, bear in mind that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that Neuren Pharmaceuticals has no debt on its balance sheet, which is rare for a loss-making pharma, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of Neuren Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Neuren Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of important factors you should further research:
Valuation: What is Neuren Pharmaceuticals 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 Neuren Pharmaceuticals 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 Neuren Pharmaceuticals’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.
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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