Zealand Pharma A/S (CPH:ZEAL): When Will It Breakeven?
Zealand Pharma A/S’s (CPSE:ZEAL): Zealand Pharma A/S, a biotechnology company, engages in the discovery, design, and development of peptide therapeutics-based medicines in Denmark. The company’s loss has recently broadened since it announced a -Ø272.27M loss in the full financial year, compared to the latest trailing-twelve-month loss of -Ø337.35M, moving it further away from breakeven. As path to profitability is the topic on ZEAL’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ZEAL, its year of breakeven and its implied growth rate.
See our latest analysis for Zealand Pharma
Expectation from analysts is ZEAL is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of Ø214.40M in 2022. So, ZEAL is predicted to breakeven approximately 4 years from today. How fast will ZEAL have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 22.42% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, ZEAL may become profitable much later than analysts predict.
Underlying developments driving ZEAL’s growth isn’t the focus of this broad overview, though, bear 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.
Before I wrap up, there’s one aspect worth mentioning. ZEAL has managed its capital prudently, with debt making up 30.69% of equity. This means that ZEAL 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 ZEAL 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 ZEAL, take a look at ZEAL’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:
Historical Track Record: What has ZEAL’s 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 Zealand Pharma’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 pass 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.
