Loss-Making BioPharmX Corporation (NYSEMKT:BPMX) Expected To Breakeven
BioPharmX Corporation’s (AMEX:BPMX): BioPharmX Corporation, a specialty pharmaceutical company, develops and commercializes novel prescription and over-the-counter (OTC) products that address dermatology and women’s health markets. The US$37.11M market-cap posted a loss in its most recent financial year of -US$18.53M and a latest trailing-twelve-month loss of -US$18.01M shrinking the gap between loss and breakeven. As path to profitability is the topic on BPMX’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for BPMX’s growth and when analysts expect the company to become profitable.
See our latest analysis for BioPharmX
BPMX is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2022, before turning a profit of US$6.52M in 2023. BPMX is therefore projected to breakeven around 5 years from today. In order to meet this breakeven date, I calculated the rate at which BPMX must grow year-on-year. It turns out an average annual growth rate of 16.93% is expected, which seems realistic. However, if this rate turns out to be too buoyant, BPMX may become profitable later than analysts predict.
I’m not going to go through company-specific developments for BPMX given that this is a high-level summary, though, bear in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a double-digit growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with BPMX is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
This article is not intended to be a comprehensive analysis on BPMX, so if you are interested in understanding the company at a deeper level, take a look at BPMX’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further examine:
Historical Track Record: What has BPMX’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 BioPharmX’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 pass 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.
