Theranexus Société Anonyme's (EPA:ALTHX): Theranexus société anonyme, a biopharmaceutical company, develops drug candidates for the treatment of central nervous system disorders. The €11m market-cap posted a loss in its most recent financial year of -€5.3m and a latest trailing-twelve-month loss of -€5.3m shrinking the gap between loss and breakeven. As path to profitability is the topic on ALTHX’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for ALTHX.
According to the 3 industry analysts covering ALTHX, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of €12m in 2020. ALTHX is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which ALTHX must grow year-on-year. It turns out an average annual growth rate of 42% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, ALTHX may become profitable much later than analysts predict.
Underlying developments driving ALTHX’s growth isn’t the focus of this broad overview, though, bear in mind that generally 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.
Before I wrap up, there’s one aspect worth mentioning. ALTHX has managed its capital prudently, with debt making up 26% of equity. This means that ALTHX has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of ALTHX to cover in one brief article, but the key fundamentals for the company can all be found in one place – ALTHX’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further research:
- Historical Track Record: What has ALTHX'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 Theranexus Société Anonyme’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.
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