Arbutus Biopharma Corporation’s (NASDAQ:ABUS): Arbutus Biopharma Corporation, a biopharmaceutical company, engages in discovering, developing, and commercializing a cure for patients suffering from chronic Hepatitis B virus (HBV) infection in Canada and the United States. The US$333.06M market-cap posted a loss in its most recent financial year of -US$384.16M and a latest trailing-twelve-month loss of -US$267.18M shrinking the gap between loss and breakeven. As path to profitability is the topic on ABUS’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for ABUS.
ABUS is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2021, before turning a profit of US$64.89M in 2022. So, ABUS is predicted to breakeven approximately 4 years from today. How fast will ABUS have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 25.15% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ABUS may become profitable much later than analysts predict.
Underlying developments driving ABUS’s growth isn’t the focus of this broad overview, though, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. ABUS has managed its capital prudently, with debt making up 7.17% of equity. This means that ABUS has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on ABUS, so if you are interested in understanding the company at a deeper level, take a look at ABUS’s company page on Simply Wall St. I’ve also put together a list of essential factors you should look at:
- Historical Track Record: What has ABUS’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Arbutus Biopharma’s board and the CEO’s back ground.
- 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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.