U.S. markets closed
  • S&P Futures

    4,130.00
    -2.75 (-0.07%)
     
  • Dow Futures

    33,522.00
    -48.00 (-0.14%)
     
  • Nasdaq Futures

    13,965.50
    -10.25 (-0.07%)
     
  • Russell 2000 Futures

    2,222.50
    -2.40 (-0.11%)
     
  • Crude Oil

    60.50
    +0.32 (+0.53%)
     
  • Gold

    1,745.90
    -1.70 (-0.10%)
     
  • Silver

    25.38
    -0.05 (-0.20%)
     
  • EUR/USD

    1.1965
    +0.0010 (+0.08%)
     
  • 10-Yr Bond

    1.6230
    -0.0520 (-3.10%)
     
  • Vix

    16.65
    -0.26 (-1.54%)
     
  • GBP/USD

    1.3758
    +0.0006 (+0.04%)
     
  • USD/JPY

    108.8400
    -0.2080 (-0.19%)
     
  • BTC-USD

    63,257.81
    +3,189.70 (+5.31%)
     
  • CMC Crypto 200

    1,356.69
    +62.70 (+4.85%)
     
  • FTSE 100

    6,890.49
    +1.37 (+0.02%)
     
  • Nikkei 225

    29,684.15
    -67.46 (-0.23%)
     

Radius Health, Inc.'s (NASDAQ:RDUS) Shift From Loss To Profit

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

We feel now is a pretty good time to analyse Radius Health, Inc.'s (NASDAQ:RDUS) business as it appears the company may be on the cusp of a considerable accomplishment. Radius Health, Inc., a biopharmaceutical company, develops and commercializes endocrine therapeutics in the areas of osteoporosis and oncology. With the latest financial year loss of US$133m and a trailing-twelve-month loss of US$113m, the US$1.1b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Radius Health will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Radius Health

Radius Health is bordering on breakeven, according to the 7 American Biotechs analysts. They expect the company to post a final loss in 2021, before turning a profit of US$23m in 2022. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 59% 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.

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

Underlying developments driving Radius Health's growth isn’t the focus of this broad overview, but, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Radius Health is it 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

  1. Valuation: What is Radius Health 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 Radius Health 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 Radius Health’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.

This article by Simply Wall St is general in nature. 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.

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