Loss-Making Capricor Therapeutics, Inc. (NASDAQ:CAPR) Expected To Breakeven In The Medium-Term
With the business potentially at an important milestone, we thought we'd take a closer look at Capricor Therapeutics, Inc.'s (NASDAQ:CAPR) future prospects. Capricor Therapeutics, Inc., a clinical-stage biotechnology company, focuses on the development of transformative cell and exosome-based therapeutics for the treatment and prevention of spectrum of diseases and disorders. The US$77m market-cap company announced a latest loss of US$20m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Capricor Therapeutics 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 Capricor Therapeutics
Consensus from 2 of the American Biotechs analysts is that Capricor Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$23m in 2023. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% 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.
We're not going to go through company-specific developments for Capricor Therapeutics 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that Capricor Therapeutics has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Capricor Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Capricor Therapeutics' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:
Historical Track Record: What has Capricor Therapeutics' 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 Capricor Therapeutics' 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.
