We feel now is a pretty good time to analyse Theravance Biopharma, Inc.'s (NASDAQ:TBPH) business as it appears the company may be on the cusp of a considerable accomplishment. Theravance Biopharma, Inc., a biopharmaceutical company, discovers, develops, and commercializes respiratory medicines in the United States, Europe, and Asia. The US$686m market-cap company’s loss lessened since it announced a US$199m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$146m, as it approaches breakeven. As path to profitability is the topic on Theravance Biopharma's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 7 of the American Pharmaceuticals analysts is that Theravance Biopharma is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$9.7m in 2022. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 50%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Theravance Biopharma given that this is a high-level summary, but, keep in mind that by and large pharmaceuticals, 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 would like to bring into light with Theravance Biopharma 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
This article is not intended to be a comprehensive analysis on Theravance Biopharma, so if you are interested in understanding the company at a deeper level, take a look at Theravance Biopharma's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:
Valuation: What is Theravance Biopharma 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 Theravance Biopharma 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 Theravance Biopharma’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.
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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.