Esperion Therapeutics, Inc.'s (NASDAQ:ESPR) Shift From Loss To Profit
We feel now is a pretty good time to analyse Esperion Therapeutics, Inc.'s (NASDAQ:ESPR) business as it appears the company may be on the cusp of a considerable accomplishment. Esperion Therapeutics, Inc., a pharmaceutical company, develops and commercializes medicines for the treatment of patients with elevated low density lipoprotein cholesterol. With the latest financial year loss of US$269m and a trailing-twelve-month loss of US$258m, the US$531m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Esperion Therapeutics' 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.
Check out our latest analysis for Esperion Therapeutics
According to the 11 industry analysts covering Esperion Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$185m in 2024. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% 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.
Given this is a high-level overview, we won’t go into details of Esperion Therapeutics' upcoming projects, however, take into account that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we would like to bring into light with Esperion Therapeutics is it 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of Esperion Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Esperion Therapeutics' company page on Simply Wall St. We've also put together a list of key aspects you should further examine:
Valuation: What is Esperion Therapeutics 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 Esperion Therapeutics 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 Esperion Therapeutics’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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