Yahoo Finance Bausch Health Companies Inc. (NYSE:BHC) On The Verge Of Breaking Even
With the business potentially at an important milestone, we thought we'd take a closer look at Bausch Health Companies Inc.'s (NYSE:BHC) future prospects. Bausch Health Companies Inc., together with its subsidiaries, develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter (OTC) products primarily in the therapeutic areas of eye health, gastroenterology, and dermatology. On 31 December 2022, the US$2.8b market-cap company posted a loss of US$225m for its most recent financial year. Many investors are wondering about the rate at which Bausch Health Companies will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Bausch Health Companies
Consensus from 7 of the American Pharmaceuticals analysts is that Bausch Health Companies is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$53m in 2023. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Bausch Health Companies' growth isn’t the focus of this broad overview, though, keep in mind 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Bausch Health Companies currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Bausch Health Companies, so if you are interested in understanding the company at a deeper level, take a look at Bausch Health Companies' company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Bausch Health Companies 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 Bausch Health Companies 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 Bausch Health Companies’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.
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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