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$37m market-cap company’s loss lessens since it announced a -US$26.5m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$25.8m, as it approaches 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.
Consensus from the 2 Biotechs analysts is PLX is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$119m in 2021. So, PLX is predicted to breakeven approximately 2 years from today. How fast will PLX 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 39% 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.
I’m not going to go through company-specific developments for PLX given that this is a high-level summary, though, bear in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company 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. PLX currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are too many aspects of PLX to cover in one brief article, but the key fundamentals for the company can all be found in one place – PLX’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:
- Historical Track Record: What has PLX'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 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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