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BioMarin Pharmaceutical Inc.'s (NASDAQ:BMRN): BioMarin Pharmaceutical Inc., a biotechnology company, develops and commercializes therapies for people with serious and life-threatening rare diseases and medical conditions. The company’s loss has recently broadened since it announced a -US$77.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$89.5m, moving it further away from breakeven. Many investors are wondering the rate at which BMRN will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for BMRN’s growth and when analysts expect the company to become profitable.
Consensus from the 22 Biotechs analysts is BMRN is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$55m in 2020. So, BMRN is predicted to breakeven approximately a few months from now. How fast will BMRN have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 74% year-on-year, on average, which is rather optimistic! 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 BMRN given that this is a high-level summary, but, keep in mind 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. BMRN has managed its capital judiciously, with debt making up 29% of equity. This means that BMRN 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 BMRN to cover in one brief article, but the key fundamentals for the company can all be found in one place – BMRN’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:
- Valuation: What is BMRN 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 BMRN 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 BioMarin Pharmaceutical’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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.