Rocket Pharmaceuticals, Inc.'s (NASDAQ:RCKT) Shift From Loss To Profit
With the business potentially at an important milestone, we thought we'd take a closer look at Rocket Pharmaceuticals, Inc.'s (NASDAQ:RCKT) future prospects. Rocket Pharmaceuticals, Inc., together with its subsidiaries, operates as a multi-platform biotechnology company that focuses on developing gene therapies for rare and devastating diseases. The company’s loss has recently broadened since it announced a US$222m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$253m, moving it further away from breakeven. As path to profitability is the topic on Rocket Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Rocket Pharmaceuticals
Consensus from 11 of the American Biotechs analysts is that Rocket Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$87m 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 56%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Rocket Pharmaceuticals' upcoming projects, but, keep in mind that by and large 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’d like to point out is that Rocket Pharmaceuticals has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Rocket Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rocket Pharmaceuticals' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Valuation: What is Rocket 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 Rocket 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 Rocket 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.
