With the business potentially at an important milestone, we thought we'd take a closer look at Ocugen, Inc.'s (NASDAQ:OCGN) future prospects. Ocugen, Inc., a clinical-stage biopharmaceutical company, focuses on the developing gene therapies to cure blindness diseases. The US$226m market-cap company announced a latest loss of US$81m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which Ocugen will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 4 industry analysts covering Ocugen, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$78m in 2025. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 44% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Ocugen given that this is a high-level summary, however, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 2.7% 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.
There are key fundamentals of Ocugen which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Ocugen, take a look at Ocugen's company page on Simply Wall St. We've also compiled a list of important factors you should further research:
Valuation: What is Ocugen 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 Ocugen 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 Ocugen’s board and the CEO’s background.
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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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.
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