Savara Inc. (NASDAQ:SVRA) Is Expected To Breakeven In The Near Future
With the business potentially at an important milestone, we thought we'd take a closer look at Savara Inc.'s (NASDAQ:SVRA) future prospects. Savara Inc., a clinical stage biopharmaceutical company, focuses on rare respiratory diseases. The US$222m market-cap company announced a latest loss of US$38m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Savara's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Savara
Savara is bordering on breakeven, according to the 4 American Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of US$20m in 2025. 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 57% is expected, 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 Savara's growth isn’t the focus of this broad overview, though, keep in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 24% 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 key aspects you should look at:
Historical Track Record: What has Savara'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.
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.
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