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Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL): Are Analysts Optimistic?

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Rigel Pharmaceuticals, Inc.'s (NASDAQ:RIGL): Rigel Pharmaceuticals, Inc., a biotechnology company, engages in the discovery and development of small molecule drugs for the treatment of immune and hematologic disorders, cancer, and rare diseases. The US$428m market-cap posted a loss in its most recent financial year of -US$70.5m and a latest trailing-twelve-month loss of -US$63.7m shrinking the gap between loss and breakeven. Many investors are wondering the rate at which RIGL will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for RIGL’s growth and when analysts expect the company to become profitable.

View our latest analysis for Rigel Pharmaceuticals

According to the 6 industry analysts covering RIGL, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$12m in 2021. Therefore, RIGL is expected to breakeven roughly 2 years from now. How fast will RIGL 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 69% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, RIGL may become profitable much later than analysts predict.

NasdaqGS:RIGL Past and Future Earnings, July 9th 2019

Underlying developments driving RIGL’s growth isn’t the focus of this broad overview, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing I’d like to point out is that RIGL has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. RIGL 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 too many aspects of RIGL to cover in one brief article, but the key fundamentals for the company can all be found in one place – RIGL’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:

  1. Historical Track Record: What has RIGL'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.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Rigel Pharmaceuticals’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.