Loss-Making Aytu BioPharma, Inc. (NASDAQ:AYTU) Expected To Breakeven In The Medium-Term
Aytu BioPharma, Inc. (NASDAQ:AYTU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aytu Biopharma, Inc., a commercial-stage pharmaceutical company, focuses on developing and commercializing novel therapeutics and consumer healthcare products the United States and internationally. The US$9.1m market-cap company posted a loss in its most recent financial year of US$110m and a latest trailing-twelve-month loss of US$32m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Aytu BioPharma will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Aytu BioPharma
Aytu BioPharma is bordering on breakeven, according to the 2 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$3.5m in 2025. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 82% year-on-year, on average, 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 Aytu BioPharma given that this is a high-level summary, however, keep in mind that by and large pharmaceuticals, 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.
Before we wrap up, there’s one issue worth mentioning. Aytu BioPharma currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Aytu BioPharma's case is 53%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Aytu BioPharma to cover in one brief article, but the key fundamentals for the company can all be found in one place – Aytu BioPharma's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Valuation: What is Aytu BioPharma 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 Aytu BioPharma 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 Aytu BioPharma’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.
