Soleno Therapeutics, Inc.'s (NASDAQ:SLNO) Shift From Loss To Profit
Soleno Therapeutics, Inc. (NASDAQ:SLNO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Soleno Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. With the latest financial year loss of US$31m and a trailing-twelve-month loss of US$21m, the US$17m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Soleno Therapeutics 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.
See our latest analysis for Soleno Therapeutics
Consensus from 2 of the American Biotechs analysts is that Soleno Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$14m in 2025. So, the company is predicted to breakeven approximately 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 70%, 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.
Given this is a high-level overview, we won’t go into details of Soleno Therapeutics' upcoming projects, however, keep 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.
One thing we’d like to point out is that Soleno Therapeutics has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Soleno Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Soleno Therapeutics' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
Historical Track Record: What has Soleno Therapeutics' 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 Soleno Therapeutics' 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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