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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, discovers and develops small molecule drugs to treat hematologic disorders, cancer, and rare immune diseases. The US$595m market-cap company’s loss lessened since it announced a US$30m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$15m, as it approaches breakeven. As path to profitability is the topic on Rigel Pharmaceuticals' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Rigel Pharmaceuticals is bordering on breakeven, according to the 6 American Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$17m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 76% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Rigel Pharmaceuticals' growth isn’t the focus of this broad overview, however, take into account that by and large biotechs, 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.
One thing we would like to bring into light with Rigel Pharmaceuticals is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Rigel Pharmaceuticals' case is 40%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
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 put together a list of essential aspects you should further examine:
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.
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.
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