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ChemoCentryx, Inc.'s (NASDAQ:CCXI) Path To Profitability

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We feel now is a pretty good time to analyse ChemoCentryx, Inc.'s (NASDAQ:CCXI) business as it appears the company may be on the cusp of a considerable accomplishment. ChemoCentryx, Inc., a biopharmaceutical company, focuses on the development and commercialization of new medications for inflammatory disorders, autoimmune diseases, and cancer in the United States. The company’s loss has recently broadened since it announced a US$132m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$141m, moving it further away from breakeven. As path to profitability is the topic on ChemoCentryx'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.

Check out our latest analysis for ChemoCentryx

ChemoCentryx is bordering on breakeven, according to the 8 American Biotechs analysts. They expect the company to post a final loss in 2023, before turning a profit of US$57m in 2024. So, the company is predicted to breakeven approximately 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 71%, 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.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of ChemoCentryx's upcoming projects, though, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 9.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of ChemoCentryx to cover in one brief article, but the key fundamentals for the company can all be found in one place – ChemoCentryx's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is ChemoCentryx 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 ChemoCentryx is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ChemoCentryx’s board and the CEO’s background.

  3. 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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