Loss-Making Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) Expected To Breakeven In The Medium-Term
We feel now is a pretty good time to analyse Alnylam Pharmaceuticals, Inc.'s (NASDAQ:ALNY) business as it appears the company may be on the cusp of a considerable accomplishment. Alnylam Pharmaceuticals, Inc., a biopharmaceutical company, focuses on discovering, developing, and commercializing novel therapeutics based on ribonucleic acid interference. The US$18b market-cap company announced a latest loss of US$853m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Alnylam Pharmaceuticals' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Alnylam Pharmaceuticals
Alnylam Pharmaceuticals is bordering on breakeven, according to the 17 American Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$111m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 61% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Alnylam Pharmaceuticals' growth isn’t the focus of this broad overview, however, 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Alnylam Pharmaceuticals currently has a debt-to-equity ratio of 115%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Alnylam Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Alnylam Pharmaceuticals' company page on Simply Wall St. We've also put together a list of essential aspects you should further research:
Valuation: What is Alnylam Pharmaceuticals 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 Alnylam Pharmaceuticals 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 Alnylam Pharmaceuticals’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.
