Ardelyx, Inc. (NASDAQ:ARDX): When Will It Breakeven?
We feel now is a pretty good time to analyse Ardelyx, Inc.'s (NASDAQ:ARDX) business as it appears the company may be on the cusp of a considerable accomplishment. Ardelyx, Inc., a biopharmaceutical company, develops and sells medicines for the treatment of cardiorenal diseases in the United States and internationally. With the latest financial year loss of US$95m and a trailing-twelve-month loss of US$85m, the US$582m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Ardelyx's path to profitability – when will it 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 Ardelyx
Ardelyx is bordering on breakeven, according to the 6 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$87m in 2023. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 63% is expected, 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 Ardelyx's growth isn’t the focus of this broad overview, however, bear 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. 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 The company has managed its capital judiciously, with debt making up 38% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Ardelyx, so if you are interested in understanding the company at a deeper level, take a look at Ardelyx's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:
Valuation: What is Ardelyx 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 Ardelyx 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 Ardelyx’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.
This article by Simply Wall St is general in nature. 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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