VYNE Therapeutics Inc.'s (NASDAQ:VYNE) Profit Outlook
We feel now is a pretty good time to analyse VYNE Therapeutics Inc.'s (NASDAQ:VYNE) business as it appears the company may be on the cusp of a considerable accomplishment. VYNE Therapeutics Inc., a pharmaceutical company, focuses on developing and commercializing various therapeutics for dermatology. The US$206m market-cap company posted a loss in its most recent financial year of US$256m and a latest trailing-twelve-month loss of US$236m shrinking the gap between loss and breakeven. As path to profitability is the topic on VYNE Therapeutics' 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.
Check out our latest analysis for VYNE Therapeutics
According to the 5 industry analysts covering VYNE Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$12m in 2023. The company is therefore projected to breakeven around 2 years from today. 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 61%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving VYNE Therapeutics' growth isn’t the focus of this broad overview, however, keep 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 we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 36% 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:
There are key fundamentals of VYNE Therapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at VYNE Therapeutics, take a look at VYNE Therapeutics' company page on Simply Wall St. We've also compiled a list of important factors you should further research:
Valuation: What is VYNE Therapeutics 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 VYNE Therapeutics 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 VYNE Therapeutics’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.
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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