Yahoo Finance Analysts Expect Breakeven For Medexus Pharmaceuticals Inc. (TSE:MDP) Before Long
With the business potentially at an important milestone, we thought we'd take a closer look at Medexus Pharmaceuticals Inc.'s (TSE:MDP) future prospects. Medexus Pharmaceuticals Inc. operates as a specialty pharmaceutical company in Canada and the United States. The CA$56m market-cap company’s loss lessened since it announced a US$28m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$8.1m, as it approaches breakeven. Many investors are wondering about the rate at which Medexus Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Medexus Pharmaceuticals
Medexus Pharmaceuticals is bordering on breakeven, according to the 4 Canadian Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$6.0m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 82% year-on-year, on average, which signals high confidence from analysts. 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 Medexus Pharmaceuticals given that this is a high-level summary, but, 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one issue worth mentioning. Medexus Pharmaceuticals currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Medexus Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Medexus Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Historical Track Record: What has Medexus 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 Medexus 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.
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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.
