Breakeven Is Near for Newron Pharmaceuticals S.p.A. (VTX:NWRN)
With the business potentially at an important milestone, we thought we'd take a closer look at Newron Pharmaceuticals S.p.A.'s (VTX:NWRN) future prospects. Newron Pharmaceuticals S.p.A., a biopharmaceutical company, focus on the development of novel therapies for the treatment of central nervous system (CNS) and pain in Italy and the United States. The CHF143m market-cap company’s loss lessened since it announced a €17m loss in the full financial year, compared to the latest trailing-twelve-month loss of €16m, as it approaches breakeven. As path to profitability is the topic on Newron Pharmaceuticals' 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.
View our latest analysis for Newron Pharmaceuticals
According to the 3 industry analysts covering Newron Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of €8.8m in 2024. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 51%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Newron Pharmaceuticals given that this is a high-level summary, however, keep in mind that by and large pharmaceuticals, 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 we would like to bring into light with Newron Pharmaceuticals 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:
There are key fundamentals of Newron Pharmaceuticals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Newron Pharmaceuticals, take a look at Newron Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:
Valuation: What is Newron Pharmaceuticals 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 Newron Pharmaceuticals 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 Newron Pharmaceuticals’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.
