Protalix BioTherapeutics, Inc.’s (NYSEMKT:PLX): Protalix BioTherapeutics, Inc., a biopharmaceutical company, focuses on the development and commercialization of recombinant therapeutic proteins based on its proprietary ProCellEx protein expression system in Israel and internationally. The US$69m market-cap posted a loss in its most recent financial year of -US$85.3m and a latest trailing-twelve-month loss of -US$51.4m shrinking the gap between loss and breakeven. Many investors are wondering the rate at which PLX 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 PLX, its year of breakeven and its implied growth rate.
According to the 2 industry analysts covering PLX, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$64m in 2020. PLX is therefore projected to breakeven around a couple of months from now! In order to meet this breakeven date, I calculated the rate at which PLX must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for PLX given that this is a high-level summary, but, bear in mind that typically biotechs, 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.
Before I wrap up, there’s one issue worth mentioning. PLX 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.
This article is not intended to be a comprehensive analysis on PLX, so if you are interested in understanding the company at a deeper level, take a look at PLX’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further examine:
- Valuation: What is PLX 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 PLX 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 Protalix BioTherapeutics’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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