Yahoo Finance Breakeven On The Horizon For Valeo Pharma Inc. (TSE:VPH)
We feel now is a pretty good time to analyse Valeo Pharma Inc.'s (TSE:VPH) business as it appears the company may be on the cusp of a considerable accomplishment. Valeo Pharma Inc., a specialty pharmaceutical company, engages in the acquisition, in-licensing brands, and sale of pharmaceutical products with primary focus on respiratory, speciality, and hospital generic products in Canada. With the latest financial year loss of CA$14m and a trailing-twelve-month loss of CA$23m, the CA$54m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Valeo Pharma's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Valeo Pharma
Consensus from 3 of the Canadian Healthcare analysts is that Valeo Pharma is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of CA$7.9m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 57%, 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.
Given this is a high-level overview, we won’t go into details of Valeo Pharma's upcoming projects, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Valeo Pharma is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are key fundamentals of Valeo Pharma which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Valeo Pharma, take a look at Valeo Pharma's company page on Simply Wall St. We've also put together a list of key factors you should further research:
Valuation: What is Valeo Pharma 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 Valeo Pharma 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 Valeo Pharma’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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
