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When Will Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) Turn A Profit?

Simply Wall St

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Cumberland Pharmaceuticals Inc.'s (NASDAQ:CPIX): Cumberland Pharmaceuticals Inc., a specialty pharmaceutical company, focuses on the acquisition, development, and commercialization of prescription products for hospital acute care, gastroenterology, and oncology markets in the United States and internationally. The US$91m market-cap company’s loss lessens since it announced a -US$7.0m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$4.7m, as it approaches breakeven. The most pressing concern for investors is CPIX’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for CPIX.

See our latest analysis for Cumberland Pharmaceuticals

According to the industry analysts covering CPIX, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$62k in 2020. CPIX is therefore projected to breakeven around a couple of months from now! How fast will CPIX 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 116% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:CPIX Past and Future Earnings, July 12th 2019

Given this is a high-level overview, I won’t go into details of CPIX’s upcoming projects, though, bear in mind that typically 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.

Before I wrap up, there’s one aspect worth mentioning. CPIX has managed its capital prudently, with debt making up 36% of equity. This means that CPIX 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:

There are key fundamentals of CPIX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at CPIX, take a look at CPIX’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further examine:

  1. Valuation: What is CPIX 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 CPIX is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cumberland 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.