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Market Sentiment Around Loss-Making Citius Pharmaceuticals, Inc. (NASDAQ:CTXR)

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·3 min read
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  • CTXR

With the business potentially at an important milestone, we thought we'd take a closer look at Citius Pharmaceuticals, Inc.'s (NASDAQ:CTXR) future prospects. Citius Pharmaceuticals, Inc., a specialty pharmaceutical company, develops and commercializes critical care products targeting medical needs with a focus on anti-infective products in adjunct cancer care, prescription products, and mesenchymal stem cell therapy. The company’s loss has recently broadened since it announced a US$18m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$24m, moving it further away from breakeven. The most pressing concern for investors is Citius Pharmaceuticals' path to profitability – when will it 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 Citius Pharmaceuticals

According to some industry analysts covering Citius Pharmaceuticals, breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$19m in 2024. The company is therefore projected to breakeven around 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 59%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

Given this is a high-level overview, we won’t go into details of Citius Pharmaceuticals' upcoming projects, but, 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.1% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Citius Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Citius Pharmaceuticals' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Valuation: What is Citius Pharmaceuticals 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 Citius Pharmaceuticals is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Citius Pharmaceuticals’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.

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

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.