Analysts Expect Breakeven For NovoCure Limited (NASDAQ:NVCR)
NovoCure Limited’s (NASDAQ:NVCR): NovoCure Limited engages in the development, manufacture, and commercialization of Tumor Treating Fields for the treatment of solid tumors. The US$2.00B market-cap company announced a latest loss of -US$61.66M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is NVCR’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for NVCR, its year of breakeven and its implied growth rate.
View our latest analysis for NovoCure
Expectation from analysts is NVCR is on the verge of breakeven. They anticipate the company to incur a final loss in 2018, before generating positive profits of US$27.76M in 2019. So, NVCR is predicted to breakeven approximately a couple of months from now! What rate will NVCR 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 74.29%, which signals high confidence from analysts. If this rate turns out to be too aggressive, NVCR may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of NVCR’s upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with NVCR is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in NVCR’s case is 85.72%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on NVCR, so if you are interested in understanding the company at a deeper level, take a look at NVCR’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:
Valuation: What is NVCR 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 NVCR 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 NovoCure’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.
