Savara Inc. (NASDAQ:SVRA): Are Analysts Optimistic?
We feel now is a pretty good time to analyse Savara Inc.'s (NASDAQ:SVRA) business as it appears the company may be on the cusp of a considerable accomplishment. Savara Inc., a clinical stage biopharmaceutical company, focuses on rare respiratory diseases. The US$673m market-cap company posted a loss in its most recent financial year of US$38m and a latest trailing-twelve-month loss of US$49m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Savara will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Savara
Consensus from 7 of the American Biotechs analysts is that Savara is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$16m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. 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 56% is expected, 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 Savara given that this is a high-level summary, however, keep in mind 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 18% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Savara, so if you are interested in understanding the company at a deeper level, take a look at Savara's company page on Simply Wall St. We've also compiled a list of important factors you should look at:
Valuation: What is Savara 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 Savara 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 Savara’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
