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Ocugen, Inc. (NASDAQ:OCGN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ocugen, Inc., a clinical-stage biopharmaceutical company, focuses on the developing gene therapies to cure blindness diseases. With the latest financial year loss of US$34m and a trailing-twelve-month loss of US$48m, the US$653m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Ocugen will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering Ocugen, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$88m in 2022. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 26% year-on-year, on average, 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.
Underlying developments driving Ocugen's growth isn’t the focus of this broad overview, however, bear in mind 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 1.6% 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 examine:
Historical Track Record: What has Ocugen'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.
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.