Eton Pharmaceuticals, Inc. (NASDAQ:ETON) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Eton Pharmaceuticals, Inc.'s (NASDAQ:ETON) business as it appears the company may be on the cusp of a considerable accomplishment. Eton Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on developing, acquiring, and commercializing pharmaceutical products for rare diseases. The US$96m market-cap company announced a latest loss of US$936k on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Eton Pharmaceuticals' path to profitability – when will it breakeven? 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 Eton Pharmaceuticals

Eton Pharmaceuticals is bordering on breakeven, according to the 2 American Pharmaceuticals analysts. They expect the company to post a final loss in 2023, before turning a profit of US$2.0m in 2024. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 118% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Underlying developments driving Eton Pharmaceuticals' growth isn’t the focus of this broad overview, but, keep in mind that typically 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 35% 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 key fundamentals of Eton Pharmaceuticals 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 Eton Pharmaceuticals, take a look at Eton Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is Eton Pharmaceuticals 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 Eton Pharmaceuticals 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 Eton Pharmaceuticals’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.

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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.