CTI BioPharma Corp’s (NASDAQ:CTIC): CTI BioPharma Corp., a biopharmaceutical company, engages in the acquisition, development, and commercialization of novel targeted therapies for blood-related cancers in the United States and internationally. The US$252.03M market-cap company’s loss lessens since it announced a -US$52.01M bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$37.13M, as it approaches breakeven. Many investors are wondering the rate at which CTIC will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for CTIC’s growth and when analysts expect the company to become profitable.
According to the industry analysts covering CTIC, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$42.83M in 2022. Therefore, CTIC is expected to breakeven roughly 4 years from now. What rate will CTIC have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 30.91%, which signals high confidence from analysts. If this rate turns out to be too aggressive, CTIC may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for CTIC given that this is a high-level summary, however, keep in mind that generally 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 would like to bring into light with CTIC is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in CTIC’s case is 52.05%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are too many aspects of CTIC to cover in one brief article, but the key fundamentals for the company can all be found in one place – CTIC’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:
- Valuation: What is CTIC 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 CTIC 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 CTI BioPharma’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.