Yahoo Finance Mayne Pharma Group Limited's (ASX:MYX) Path To Profitability
We feel now is a pretty good time to analyse Mayne Pharma Group Limited's (ASX:MYX) business as it appears the company may be on the cusp of a considerable accomplishment. Mayne Pharma Group Limited, a specialty pharmaceutical company, manufactures and sells branded and generic pharmaceutical products in Australia, the United States, Asia, and internationally. The AU$600m market-cap company announced a latest loss of AU$208m on 30 June 2021 for its most recent financial year result. The most pressing concern for investors is Mayne Pharma Group'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.
See our latest analysis for Mayne Pharma Group
Mayne Pharma Group is bordering on breakeven, according to the 6 Australian Pharmaceuticals analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$14m in 2023. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 112%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Mayne Pharma Group given that this is a high-level summary, but, keep in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Mayne Pharma Group is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Mayne Pharma Group's case is 44%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Mayne Pharma Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Mayne Pharma Group, take a look at Mayne Pharma Group's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Valuation: What is Mayne Pharma Group 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 Mayne Pharma Group 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 Mayne Pharma Group’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.
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.
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