Analysts Are Optimistic We'll See A Profit From MannKind Corporation (NASDAQ:MNKD)
We feel now is a pretty good time to analyse MannKind Corporation's (NASDAQ:MNKD) business as it appears the company may be on the cusp of a considerable accomplishment. MannKind Corporation, a biopharmaceutical company, focuses on the development and commercialization of inhaled therapeutic products for endocrine and orphan lung diseases in the United States. The US$903m market-cap company posted a loss in its most recent financial year of US$87m and a latest trailing-twelve-month loss of US$31m shrinking the gap between loss and breakeven. As path to profitability is the topic on MannKind's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for MannKind
MannKind is bordering on breakeven, according to the 6 American Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$32m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 47% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of MannKind's upcoming projects, however, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with MannKind is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of MannKind to cover in one brief article, but the key fundamentals for the company can all be found in one place – MannKind's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Valuation: What is MannKind 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 MannKind 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 MannKind’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.
