TherapeuticsMD, Inc.'s (NASDAQ:TXMD): TherapeuticsMD, Inc. operates as a women’s healthcare company in the United States. The US$326m market-cap posted a loss in its most recent financial year of -US$176.1m and a latest trailing-twelve-month loss of -US$193.5m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is TXMD’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for TXMD, its year of breakeven and its implied growth rate.
According to the 9 industry analysts covering TXMD, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$21m in 2022. TXMD is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, I calculated the rate at which TXMD must grow year-on-year. It turns out an average annual growth rate of 70% 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 TXMD’s growth isn’t the focus of this broad overview, however, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business 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 I would like to bring into light with TXMD is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are key fundamentals of TXMD which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at TXMD, take a look at TXMD’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further research:
- Valuation: What is TXMD 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 TXMD 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 TherapeuticsMD’s board and the CEO’s back ground.
- 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. 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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