We feel now is a pretty good time to analyse OptiNose, Inc.'s (NASDAQ:OPTN) business as it appears the company may be on the cusp of a considerable accomplishment. OptiNose, Inc., a specialty pharmaceutical company, focuses on the development and commercialization of products for patients treated by ear, nose, throat, and allergy specialists in the United States. With the latest financial year loss of US$82m and a trailing-twelve-month loss of US$77m, the US$319m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which OptiNose will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 4 of the American Pharmaceuticals analysts is that OptiNose is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$15m in 2024. The company is therefore projected to breakeven around 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 70% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving OptiNose's growth isn’t the focus of this broad overview, though, keep in mind 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.
Before we wrap up, there’s one issue worth mentioning. OptiNose 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.
This article is not intended to be a comprehensive analysis on OptiNose, so if you are interested in understanding the company at a deeper level, take a look at OptiNose's company page on Simply Wall St. We've also compiled a list of key factors you should further research:
Valuation: What is OptiNose 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 OptiNose 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 OptiNose’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.
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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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