Yahoo Finance LakeShore Biopharma Co., Ltd (NASDAQ:LSB): When Will It Breakeven?
LakeShore Biopharma Co., Ltd (NASDAQ:LSB) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. LakeShore Biopharma Co., Ltd, a biopharmaceutical company, engages in discovering, developing, manufacturing, and commercializing of vaccines and therapeutic biologics for infectious diseases and cancer. With the latest financial year loss of CN¥145m and a trailing-twelve-month loss of CN¥334m, the US$157m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is LakeShore Biopharma's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for LakeShore Biopharma
Consensus from 2 of the American Biotechs analysts is that LakeShore Biopharma is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥118m in 2026. So, the company is predicted to breakeven approximately 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 58% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving LakeShore Biopharma's growth isn’t the focus of this broad overview, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we would like to bring into light with LakeShore Biopharma is its debt-to-equity ratio of 116%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of LakeShore Biopharma to cover in one brief article, but the key fundamentals for the company can all be found in one place – LakeShore Biopharma's company page on Simply Wall St. We've also compiled a list of key factors you should further research:
Historical Track Record: What has LakeShore Biopharma'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 LakeShore Biopharma'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.
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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.
