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Global Blood Therapeutics, Inc.'s (NASDAQ:GBT): Global Blood Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in the discovery, development, and delivery of treatments for underserved patient communities. With the latest financial year loss of -US$266.8m and a trailing-twelve month of -US$290.9m, the US$3.9b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is GBT’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for GBT’s growth and when analysts expect the company to become profitable.
Consensus from the 16 Biotechs analysts is GBT is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$89m in 2022. GBT is therefore projected to breakeven around 2 years from today. How fast will GBT have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving GBT’s growth isn’t the focus of this broad overview, however, bear in mind that by and large biotechs, 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 aspect worth mentioning. GBT has managed its capital judiciously, with debt making up 14% of equity. This means that GBT has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of GBT to cover in one brief article, but the key fundamentals for the company can all be found in one place – GBT’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:
Valuation: What is GBT 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 GBT 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 Global Blood Therapeutics’s board and the CEO’s back ground.
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. 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. Thank you for reading.