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Immutep Limited (ASX:IMM): Are Analysts Optimistic?

Simply Wall St

Immutep Limited's (ASX:IMM): Immutep Limited, a biotechnology company, engages in the research, development, and commercialization of biological products. With the latest financial year loss of -AU$12.7m and a trailing-twelve month of -AU$17.1m, the AU$98m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which IMM will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for IMM.

See our latest analysis for Immutep

Consensus from the 3 Biotechs analysts is IMM is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of AU$14m in 2022. So, IMM is predicted to breakeven approximately 3 years from now. In order to meet this breakeven date, I calculated the rate at which IMM must grow year-on-year. It turns out an average annual growth rate of 84% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

ASX:IMM Past and Future Earnings, April 12th 2019

I’m not going to go through company-specific developments for IMM given that this is a high-level summary, though, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company 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 I’d like to point out is that IMM has managed its capital judiciously, with debt making up 21% of equity. This means that IMM has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on IMM, so if you are interested in understanding the company at a deeper level, take a look at IMM’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further research:

  1. Valuation: What is IMM 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 IMM is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Immutep’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.