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CASI Pharmaceuticals, Inc.'s (NASDAQ:CASI) Path To Profitability

Simply Wall St

CASI Pharmaceuticals, Inc.'s (NASDAQ:CASI): CASI Pharmaceuticals, Inc., a pharmaceutical company, develops pharmaceutical products and various therapeutics in China, the United States, and internationally. With the latest financial year loss of -US$27.5m and a trailing-twelve month of -US$42.4m, the US$317m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on CASI’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CASI.

See our latest analysis for CASI Pharmaceuticals

According to the 3 industry analysts covering CASI, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$6.3m in 2021. Therefore, CASI is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which CASI must grow year-on-year. It turns out an average annual growth rate of 70% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, CASI may become profitable much later than analysts predict.

NasdaqCM:CASI Past and Future Earnings, November 14th 2019

I’m not going to go through company-specific developments for CASI given that this is a high-level summary, however, take into account 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.

Before I wrap up, there’s one aspect worth mentioning. CASI has managed its capital judiciously, with debt making up of equity. This means that CASI has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on CASI, so if you are interested in understanding the company at a deeper level, take a look at CASI’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should look at:

  1. Historical Track Record: What has CASI'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.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CASI Pharmaceuticals’s board and the CEO’s back ground.
  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.