Biohaven Pharmaceutical Holding Company Ltd’s (NYSE:BHVN): Biohaven Pharmaceutical Holding Company Ltd., a clinical-stage biopharmaceutical company, develops product candidates to treat neurological diseases, including rare disorders. With the latest financial year loss of -US$139.20M and a trailing-twelve month of -US$201.90M, the US$1.59B market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on BHVN’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for BHVN.
Expectation from analysts is BHVN is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$18.07M in 2022. So, BHVN is predicted to breakeven approximately 4 years from today. How fast will BHVN have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 22.44% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, BHVN may become profitable much later than analysts predict.
Underlying developments driving BHVN’s growth isn’t the focus of this broad overview, however, bear in mind that by and large 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.
One thing I’d like to point out is that BHVN has managed its capital prudently, with debt making up 0.33% of equity. This means that BHVN has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of BHVN to cover in one brief article, but the key fundamentals for the company can all be found in one place – BHVN’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:
- Historical Track Record: What has BHVN’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 Biohaven Pharmaceutical Holding’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.