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Evoke Pharma, Inc. (NASDAQ:EVOK): Are Analysts Optimistic?

We feel now is a pretty good time to analyse Evoke Pharma, Inc.'s (NASDAQ:EVOK) business as it appears the company may be on the cusp of a considerable accomplishment. Evoke Pharma, Inc., a specialty pharmaceutical company, primarily focuses on the development and commercialization of drugs for the treatment of gastroenterological disorders and diseases. On 31 December 2023, the US$5.7m market-cap company posted a loss of US$7.8m for its most recent financial year. The most pressing concern for investors is Evoke Pharma's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Evoke Pharma

According to some industry analysts covering Evoke Pharma, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$3.5m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 80% 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.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Evoke Pharma's upcoming projects, but, bear in mind that generally 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.

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One thing we would like to bring into light with Evoke Pharma 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.

Next Steps:

There are too many aspects of Evoke Pharma to cover in one brief article, but the key fundamentals for the company can all be found in one place – Evoke Pharma's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

  1. Historical Track Record: What has Evoke Pharma'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Evoke Pharma's board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.