Athenex Inc’s (NASDAQ:ATNX) Shift From Loss To Profit
Athenex Inc’s (NASDAQ:ATNX): Athenex, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapies for the treatment of cancer. The company’s loss has recently broadened since it announced a -US$87.71M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$142.94M, moving it further away from breakeven. Many investors are wondering the rate at which ATNX will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for ATNX, its year of breakeven and its implied growth rate.
View our latest analysis for Athenex
According to the industry analysts covering ATNX, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$138.21M in 2022. ATNX is therefore projected to breakeven around 4 years from today. 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 37.12%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for ATNX given that this is a high-level summary, but, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before I wrap up, there’s one aspect worth mentioning. ATNX has managed its capital prudently, with debt making up 1.57% 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.
Next Steps:
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:
Valuation: What is ATNX 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 ATNX 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 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.
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.
