Breakeven On The Horizon For MannKind Corporation (NASDAQ:MNKD)
With the business potentially at an important milestone, we thought we'd take a closer look at MannKind Corporation's (NASDAQ:MNKD) future prospects. MannKind Corporation, a biopharmaceutical company, focuses on the development and commercialization of inhaled therapeutic products for endocrine and orphan lung diseases in the United States. On 31 December 2022, the US$1.2b market-cap company posted a loss of US$87m for its most recent financial year. The most pressing concern for investors is MannKind's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for MannKind
According to the 6 industry analysts covering MannKind, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$40m in 2024. Therefore, the company is expected to breakeven just over a year 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 57% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for MannKind given that this is a high-level summary, though, keep in mind that generally biotechs, 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 MannKind is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
This article is not intended to be a comprehensive analysis on MannKind, so if you are interested in understanding the company at a deeper level, take a look at MannKind's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Valuation: What is MannKind 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 MannKind 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 MannKind’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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