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Market Sentiment Around Loss-Making Aquestive Therapeutics, Inc. (NASDAQ:AQST)

Simply Wall St

Aquestive Therapeutics, Inc.'s (NASDAQ:AQST): Aquestive Therapeutics, Inc., a specialty pharmaceutical company, focuses on identifying, developing, and commercializing various products to address unmet medical needs. The US$95m market-cap posted a loss in its most recent financial year of -US$61.4m and a latest trailing-twelve-month loss of -US$64.2m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on AQST’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for AQST.

View our latest analysis for Aquestive Therapeutics

Consensus from the 6 Pharmaceuticals analysts is AQST is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$53m in 2022. Therefore, AQST is expected to breakeven roughly 3 years from today. How fast will AQST have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:AQST Past and Future Earnings, September 3rd 2019

Given this is a high-level overview, I won’t go into details of AQST’s upcoming projects, though, take into account that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one issue worth mentioning. AQST 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 key fundamentals of AQST 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 AQST, take a look at AQST’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:

  1. Valuation: What is AQST 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 AQST 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 Aquestive Therapeutics’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.