Athenex, Inc.'s (NASDAQ:ATNX): Athenex, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of various therapies for the treatment of cancer and related conditions in North America and Asia. The US$1.1b market-cap company’s loss lessens since it announced a -US$123.7m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$107.9m, as it approaches breakeven. As path to profitability is the topic on ATNX’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for ATNX’s growth and when analysts expect the company to become profitable.
According to the 8 industry analysts covering ATNX, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$39m in 2022. So, ATNX is predicted to breakeven approximately 2 years from now. What rate will ATNX have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 73%, 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 ATNX’s growth isn’t the focus of this broad overview, but, take into account 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.
Before I wrap up, there’s one aspect worth mentioning. ATNX has managed its capital prudently, with debt making up 34% of equity. This means that ATNX 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 ATNX, so if you are interested in understanding the company at a deeper level, take a look at ATNX’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:
Historical Track Record: What has ATNX'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 Athenex’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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.