Yahoo Finance Adial Pharmaceuticals, Inc. (NASDAQ:ADIL): Is Breakeven Near?
With the business potentially at an important milestone, we thought we'd take a closer look at Adial Pharmaceuticals, Inc.'s (NASDAQ:ADIL) future prospects. Adial Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development of therapeutics for the treatment or prevention of addiction and related disorders. With the latest financial year loss of US$19m and a trailing-twelve-month loss of US$16m, the US$13m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Adial Pharmaceuticals will turn a profit, with the big question being “when will the company 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 Adial Pharmaceuticals
Adial Pharmaceuticals is bordering on breakeven, according to the 2 American Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of US$7.0m in 2025. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 52% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Adial Pharmaceuticals' growth isn’t the focus of this broad overview, but, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that Adial Pharmaceuticals 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 the company 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 Adial Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Adial Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Historical Track Record: What has Adial Pharmaceuticals' 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 Adial Pharmaceuticals' 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.
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.
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