Mithra Pharmaceuticals S.A.'s (EBR:MITRA): Mithra Pharmaceuticals S.A. develops, manufactures, and markets complex therapeutics in the areas of contraception, menopause, and hormone-dependent cancers in Europe and internationally. The company’s loss has recently broadened since it announced a -€27.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of -€85.4m, moving it further away from breakeven. Many investors are wondering the rate at which MITRA will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for MITRA, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering MITRA, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €61m in 2021. Therefore, MITRA is expected to breakeven roughly a couple of months from now! How fast will MITRA have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 78% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, MITRA may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of MITRA’s upcoming projects, but, keep in mind that generally pharmaceuticals, 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 I would like to bring into light with MITRA is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in MITRA’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of MITRA to cover in one brief article, but the key fundamentals for the company can all be found in one place – MITRA’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further research:
- Valuation: What is MITRA 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 MITRA 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 Mithra Pharmaceuticals’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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