Ionis Pharmaceuticals Inc’s (NASDAQ:IONS): Ionis Pharmaceuticals, Inc. discovers and develops RNA-targeted therapeutics. With the latest financial year loss of -US$6.0m and a trailing-twelve month of -US$50.4m, the US$7.07b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is IONS’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for IONS.
Expectation from Biotechs analysts is IONS is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of US$20.6m in 2019. IONS is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which IONS must grow year-on-year. It turns out an average annual growth rate of 75.2% is expected, which is rather optimistic! If this rate turns out to be too aggressive, IONS may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for IONS given that this is a high-level summary, but, bear in mind that generally 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.
One thing I would like to bring into light with IONS is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in IONS’s case is 76.6%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are too many aspects of IONS to cover in one brief article, but the key fundamentals for the company can all be found in one place – IONS’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:
- Valuation: What is IONS 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 IONS 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 Ionis Pharmaceuticals’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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.