Analysts Expect Newron Pharmaceuticals S.p.A. (VTX:NWRN) To Breakeven Soon
We feel now is a pretty good time to analyse Newron Pharmaceuticals S.p.A.'s (VTX:NWRN) business as it appears the company may be on the cusp of a considerable accomplishment. Newron Pharmaceuticals S.p.A., a biopharmaceutical company, focus on the development of novel therapies for the treatment of central nervous system (CNS) and pain in Italy and the United States. On 31 December 2022, the CHF77m market-cap company posted a loss of €17m for its most recent financial year. Many investors are wondering about the rate at which Newron Pharmaceuticals 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 Newron Pharmaceuticals
According to the 3 industry analysts covering Newron Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of €4.4m in 2023. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 56% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Newron Pharmaceuticals' upcoming projects, though, bear in mind 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 Newron Pharmaceuticals is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
This article is not intended to be a comprehensive analysis on Newron Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Newron Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Newron 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 Newron 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 Newron 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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