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Analysts Expect Breakeven For RVL Pharmaceuticals plc (NASDAQ:RVLP) Before Long

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RVL Pharmaceuticals plc (NASDAQ:RVLP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. RVL Pharmaceuticals plc, a specialty pharmaceutical company, focuses on the development and commercialization of pharmaceutical products that target markets with underserved patient populations in the ocular and medical aesthetics therapeutic areas in the United States, Argentina, and Hungary. The US$115m market-cap company’s loss lessened since it announced a US$83m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$76m, as it approaches breakeven. Many investors are wondering about the rate at which RVL 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.

Check out our latest analysis for RVL Pharmaceuticals

RVL Pharmaceuticals is bordering on breakeven, according to the 3 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$12m in 2024. The company is therefore projected to breakeven around 2 years from today. 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 70%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for RVL Pharmaceuticals given that this is a high-level summary, but, take into account that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. 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 RVL Pharmaceuticals is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in RVL Pharmaceuticals' case is 67%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of RVL Pharmaceuticals 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 RVL Pharmaceuticals, take a look at RVL Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

  1. Valuation: What is RVL 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 RVL Pharmaceuticals is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on RVL Pharmaceuticals’s board and the CEO’s background.

  3. 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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