Kadmon Holdings, Inc.’s (NYSE:KDMN): Kadmon Holdings, Inc., a biopharmaceutical company, discovers, develops, and commercializes small molecules and biologics primarily for the treatment of inflammatory and fibrotic diseases. The US$379m market-cap company announced a latest loss of -US$56.3m on 31 December 2018 for its most recent financial year result. The most pressing concern for investors is KDMN’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for KDMN, its year of breakeven and its implied growth rate.
KDMN is bordering on breakeven, according to the 2 Biotechs analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$157m in 2021. Therefore, KDMN is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, I calculated the rate at which KDMN must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, KDMN may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of KDMN’s upcoming projects, however, take into account that generally 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.
One thing I’d like to point out is that KDMN has managed its capital prudently, with debt making up 31% of equity. This means that KDMN 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 KDMN to cover in one brief article, but the key fundamentals for the company can all be found in one place – KDMN’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:
- Historical Track Record: What has KDMN’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kadmon Holdings’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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