Aurinia Pharmaceuticals Inc’s (NASDAQ:AUPH): Aurinia Pharmaceuticals Inc., a clinical stage biopharmaceutical company, engages in the development of a therapeutic drug to treat autoimmune diseases in Canada and internationally. The US$447.14M market-cap posted a loss in its most recent financial year of -US$23.29M and a latest trailing-twelve-month loss of -US$75.79M leading to an even wider gap between loss and breakeven. As path to profitability is the topic on AUPH’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for AUPH’s growth and when analysts expect the company to become profitable.
AUPH is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2020, before turning a profit of US$16.36M in 2021. AUPH is therefore projected to breakeven around 3 years from now. How fast will AUPH have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 59.18% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, AUPH may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of AUPH’s upcoming projects, but, keep in mind that generally 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 I’d like to point out is that AUPH has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. AUPH currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of AUPH to cover in one brief article, but the key fundamentals for the company can all be found in one place – AUPH’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:
- Valuation: What is AUPH 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 AUPH 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 Aurinia Pharmaceuticals’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.