Yahoo Finance Botanix Pharmaceuticals Limited's (ASX:BOT) Profit Outlook
Botanix Pharmaceuticals Limited's (ASX:BOT): Botanix Pharmaceuticals Limited, a clinical stage cannabinoid therapeutics company, develops therapeutics for serious skin diseases in Australia. The AU$68m market-cap posted a loss in its most recent financial year of -AU$17.0m and a latest trailing-twelve-month loss of -AU$19.9m leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which BOT will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for BOT.
Check out our latest analysis for Botanix Pharmaceuticals
BOT is bordering on breakeven, according to Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$29m in 2022. So, BOT is predicted to breakeven approximately 2 years from today. How fast will BOT 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 108% year-on-year, on average, which signals high confidence from analysts. 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 BOT’s upcoming projects, 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.
One thing I’d like to point out is that BOT has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which typically has high debt relative to its equity. This means that BOT has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on BOT, so if you are interested in understanding the company at a deeper level, take a look at BOT’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further research:
Valuation: What is BOT 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 BOT 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 Botanix 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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