With the business potentially at an important milestone, we thought we'd take a closer look at IVERIC bio, Inc.'s (NASDAQ:ISEE) future prospects. IVERIC bio, Inc., a biopharmaceutical company, focuses on the discovery and development of novel treatments for retinal diseases with unmet medical needs. On 31 December 2022, the US$4.3b market-cap company posted a loss of US$185m for its most recent financial year. Many investors are wondering about the rate at which IVERIC bio 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 12 of the American Biotechs analysts is that IVERIC bio is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$746k in 2025. The company is therefore projected to breakeven around 2 years from now. 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 56%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for IVERIC bio given that this is a high-level summary, though, take into account 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’d like to point out is that The company has managed its capital judiciously, with debt making up 18% of equity. This means that it 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 key fundamentals of IVERIC bio which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at IVERIC bio, take a look at IVERIC bio's company page on Simply Wall St. We've also compiled a list of key factors you should look at:
Valuation: What is IVERIC bio 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 IVERIC bio 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 IVERIC bio’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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