When Will Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Become Profitable?
Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Rigel Pharmaceuticals, Inc., a biotechnology company, engages in discovering, developing, and providing therapies that enhance the lives of patients with hematologic disorders and cancer. With the latest financial year loss of US$59m and a trailing-twelve-month loss of US$24m, the US$232m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Rigel Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Rigel Pharmaceuticals
According to the 6 industry analysts covering Rigel Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$16m in 2026. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 60%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Rigel Pharmaceuticals 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 we wrap up, there’s one issue worth mentioning. Rigel Pharmaceuticals 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of Rigel Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rigel Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:
Valuation: What is Rigel Pharmaceuticals 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 Rigel Pharmaceuticals 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 Rigel Pharmaceuticals’s board and the CEO’s background.
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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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.
