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When Can We Expect A Profit From Applied Molecular Transport Inc. (NASDAQ:AMTI)?

·3 min read

With the business potentially at an important milestone, we thought we'd take a closer look at Applied Molecular Transport Inc.'s (NASDAQ:AMTI) future prospects. Applied Molecular Transport Inc., a clinical-stage biopharmaceutical company, engages in the design and development of a pipeline of oral and respiratory biologic product candidates to treat autoimmune, inflammatory, metabolic, and other diseases. With the latest financial year loss of US$100m and a trailing-twelve-month loss of US$135m, the US$77m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Applied Molecular Transport's 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.

View our latest analysis for Applied Molecular Transport

Applied Molecular Transport is bordering on breakeven, according to the 4 American Biotechs analysts. They expect the company to post a final loss in 2023, before turning a profit of US$23m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Applied Molecular Transport's growth isn’t the focus of this broad overview, but, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. Applied Molecular Transport currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Applied Molecular Transport, so if you are interested in understanding the company at a deeper level, take a look at Applied Molecular Transport's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

  1. Historical Track Record: What has Applied Molecular Transport'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 Applied Molecular Transport's board and the CEO’s background.

  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.

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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