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When Will Pulmatrix, Inc. (NASDAQ:PULM) Turn A Profit?

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·3 min read
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With the business potentially at an important milestone, we thought we'd take a closer look at Pulmatrix, Inc.'s (NASDAQ:PULM) future prospects. Pulmatrix, Inc., a clinical stage biopharmaceutical company, discovers and develops inhaled therapies to prevent and treat respiratory and other diseases with unmet medical needs in the United States. With the latest financial year loss of US$19m and a trailing-twelve-month loss of US$19m, the US$23m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Pulmatrix 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.

Check out our latest analysis for Pulmatrix

Expectations from some of the American Pharmaceuticals analysts is that Pulmatrix is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$20m in 2024. 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 59% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Pulmatrix given that this is a high-level summary, however, keep in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Pulmatrix currently has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Pulmatrix 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 Pulmatrix, take a look at Pulmatrix's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Valuation: What is Pulmatrix 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 Pulmatrix is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Pulmatrix’s board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.