TherapeuticsMD Inc’s (NASDAQ:TXMD): TherapeuticsMD, Inc. operates as a women’s health care product company. With the latest financial year loss of -US$77m and a trailing-twelve month of -US$94m, the US$1.2b market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on TXMD’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for TXMD.
TXMD is bordering on breakeven, according to Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$40m in 2020. So, TXMD is predicted to breakeven approximately a couple of months from now! How fast will TXMD have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 76% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for TXMD given that this is a high-level summary, though, bear in mind that typically 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.
Before I wrap up, there’s one issue worth mentioning. TXMD currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in TXMD’s case is 94%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of TXMD to cover in one brief article, but the key fundamentals for the company can all be found in one place – TXMD’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should look at:
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.