Ocular Therapeutix, Inc.'s (NASDAQ:OCUL): Ocular Therapeutix, Inc., a biopharmaceutical company, focuses on the formulation, development, and commercialization of therapies for diseases and conditions of the eye using its bioresorbable hydrogel platform technology. The company’s loss has recently broadened since it announced a -US$60.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$77.8m, moving it further away from breakeven. As path to profitability is the topic on OCUL’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for OCUL’s growth and when analysts expect the company to become profitable.
OCUL is bordering on breakeven, according to the 5 Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$7.9m in 2022. OCUL is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, I calculated the rate at which OCUL must grow year-on-year. It turns out an average annual growth rate of 59% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for OCUL given that this is a high-level summary, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one issue worth mentioning. OCUL currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and OCUL has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of OCUL which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at OCUL, take a look at OCUL’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:
- Valuation: What is OCUL 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 OCUL 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 Ocular Therapeutix’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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