Zynerba Pharmaceuticals, Inc.'s (NASDAQ:ZYNE) Path To Profitability
Zynerba Pharmaceuticals, Inc.'s (NASDAQ:ZYNE): Zynerba Pharmaceuticals, Inc. operates as a clinical stage specialty pharmaceutical company. With the latest financial year loss of -US$39.9m and a trailing-twelve month of -US$30.0m, the US$107m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on ZYNE’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ZYNE, its year of breakeven and its implied growth rate.
Check out our latest analysis for Zynerba Pharmaceuticals
Consensus from the 7 Pharmaceuticals analysts is ZYNE is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$26m in 2022. Therefore, ZYNE is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which ZYNE must grow year-on-year. It turns out an average annual growth rate of 60% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of ZYNE’s upcoming projects, 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.
One thing I’d like to point out is that ZYNE has managed its capital prudently, with debt making up -0.02% of equity. This means that ZYNE 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 too many aspects of ZYNE to cover in one brief article, but the key fundamentals for the company can all be found in one place – ZYNE’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further research:
Valuation: What is ZYNE 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 ZYNE 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 Zynerba Pharmaceuticals’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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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