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MannKind Corporation (NASDAQ:MNKD): When Will It Breakeven?

Simply Wall St
·3 min read

MannKind Corporation (NASDAQ:MNKD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MannKind Corporation, a biopharmaceutical company, focuses on the development and commercialization of inhaled therapeutic products for diabetes and pulmonary arterial hypertension patients in the United States. With the latest financial year loss of US$52m and a trailing-twelve-month loss of US$44m, the US$481m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which MannKind will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for MannKind

According to the 5 industry analysts covering MannKind, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$14m in 2023. So, the company is predicted to breakeven approximately 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 66%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving MannKind's growth isn’t the focus of this broad overview, but, take into account that by and large 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. MannKind 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:

There are too many aspects of MannKind to cover in one brief article, but the key fundamentals for the company can all be found in one place – MannKind's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

  1. Historical Track Record: What has MannKind'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MannKind's board and the CEO’s background.

  3. 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.