Biofrontera Inc. (NASDAQ:BFRI): Is Breakeven Near?
We feel now is a pretty good time to analyse Biofrontera Inc.'s (NASDAQ:BFRI) business as it appears the company may be on the cusp of a considerable accomplishment. Biofrontera Inc., a biopharmaceutical company, engages in the commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. With the latest financial year loss of US$640k and a trailing-twelve-month loss of US$26m, the US$2.3m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Biofrontera's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Biofrontera
Consensus from 2 of the American Pharmaceuticals analysts is that Biofrontera is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$8.6m in 2026. Therefore, the company is expected to breakeven roughly 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 62% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Biofrontera's growth isn’t the focus of this broad overview, though, take into account that typically pharmaceuticals, 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.
One thing we would like to bring into light with Biofrontera is its debt-to-equity ratio of 163%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Biofrontera to cover in one brief article, but the key fundamentals for the company can all be found in one place – Biofrontera's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
Historical Track Record: What has Biofrontera'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 Biofrontera'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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
