G1 Therapeutics, Inc.'s (NASDAQ:GTHX) Path To Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at G1 Therapeutics, Inc.'s (NASDAQ:GTHX) future prospects. G1 Therapeutics, Inc., a commercial-stage biopharmaceutical company, engages in the discovery, development, and commercialization of small molecule therapeutics for the treatment of patients with cancer. The US$135m market-cap company’s loss lessened since it announced a US$148m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$126m, as it approaches breakeven. The most pressing concern for investors is G1 Therapeutics' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for G1 Therapeutics
G1 Therapeutics is bordering on breakeven, according to the 8 American Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$91m in 2025. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 50%, which is extremely buoyant. 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 G1 Therapeutics' upcoming projects, however, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with G1 Therapeutics is its debt-to-equity ratio of 172%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of G1 Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – G1 Therapeutics' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Valuation: What is G1 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 G1 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 G1 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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