Analysts Expect Breakeven For Soleno Therapeutics, Inc. (NASDAQ:SLNO) Before Long
We feel now is a pretty good time to analyse Soleno Therapeutics, Inc.'s (NASDAQ:SLNO) business as it appears the company may be on the cusp of a considerable accomplishment. Soleno Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. The US$1.4b market-cap company posted a loss in its most recent financial year of US$24m and a latest trailing-twelve-month loss of US$33m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Soleno Therapeutics will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Soleno Therapeutics
Consensus from 5 of the American Biotechs analysts is that Soleno Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$62m in 2026. The company is therefore projected to breakeven around 2 years 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 59%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Soleno Therapeutics' growth isn’t the focus of this broad overview, but, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Soleno Therapeutics has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Soleno Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Soleno Therapeutics' company page on Simply Wall St. We've also compiled a list of important factors you should look at:
Valuation: What is Soleno Therapeutics 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 Soleno Therapeutics 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 Soleno Therapeutics’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.
