Analysts Are Optimistic We'll See A Profit From Fennec Pharmaceuticals Inc. (NASDAQ:FENC)
We feel now is a pretty good time to analyse Fennec Pharmaceuticals Inc.'s (NASDAQ:FENC) business as it appears the company may be on the cusp of a considerable accomplishment. Fennec Pharmaceuticals Inc. operates as a biopharmaceutical company. With the latest financial year loss of US$24m and a trailing-twelve-month loss of US$20m, the US$256m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Fennec Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Fennec Pharmaceuticals
Consensus from 5 of the American Biotechs analysts is that Fennec Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$8.1m in 2024. The company is therefore projected to breakeven around 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 68% year-on-year, on average, which signals high confidence from analysts. 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 Fennec Pharmaceuticals' upcoming projects, but, keep in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we would like to bring into light with Fennec 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are too many aspects of Fennec Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fennec Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Fennec 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 Fennec 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 Fennec 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.
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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.
