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When Will Endo International plc (NASDAQ:ENDP) Breakeven?

Simply Wall St

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Endo International plc's (NASDAQ:ENDP): Endo International plc manufactures and sells generic and branded pharmaceuticals in the United States, Canada, and internationally. On 31 December 2018, the US$1.9b market-cap posted a loss of -US$961.8m for its most recent financial year. Many investors are wondering the rate at which ENDP will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for ENDP’s growth and when analysts expect the company to become profitable.

View our latest analysis for Endo International

Consensus from the 14 Pharmaceuticals analysts is ENDP is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$82m in 2020. So, ENDP is predicted to breakeven approximately a couple of months from now! How fast will ENDP 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 80% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ENDP may become profitable much later than analysts predict.

NasdaqGS:ENDP Past and Future Earnings, April 9th 2019

Given this is a high-level overview, I won’t go into details of ENDP’s upcoming projects, though, take into account that generally 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 issue worth mentioning. ENDP currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of ENDP to cover in one brief article, but the key fundamentals for the company can all be found in one place – ENDP’s company page on Simply Wall St. I’ve also put together a list of important aspects you should look at:

  1. Valuation: What is ENDP 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 ENDP 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 Endo International’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.