Yahoo Finance Analysts Expect Breakeven For ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)
ACADIA Pharmaceuticals Inc.'s (NASDAQ:ACAD): ACADIA Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of small molecule drugs that address unmet medical needs in central nervous system disorders. The company’s loss has recently broadened since it announced a -US$245.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$247.7m, moving it further away from breakeven. Many investors are wondering the rate at which ACAD will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for ACAD, its year of breakeven and its implied growth rate.
Check out our latest analysis for ACADIA Pharmaceuticals
According to the 15 industry analysts covering ACAD, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$53m in 2021. Therefore, ACAD is expected to breakeven roughly a few months from now. What rate will ACAD have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 58%, which is extremely buoyant. If this rate turns out to be too aggressive, ACAD may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of ACAD’s upcoming projects, however, take into account that generally biotechs, 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.
Before I wrap up, there’s one aspect worth mentioning. ACAD currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that ACAD 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:
There are too many aspects of ACAD to cover in one brief article, but the key fundamentals for the company can all be found in one place – ACAD’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further research:
Valuation: What is ACAD 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 ACAD 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 ACADIA Pharmaceuticals’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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