Yahoo Finance Loss-Making Travere Therapeutics, Inc. (NASDAQ:TVTX) Expected To Breakeven In The Medium-Term
With the business potentially at an important milestone, we thought we'd take a closer look at Travere Therapeutics, Inc.'s (NASDAQ:TVTX) future prospects. Travere Therapeutics, Inc., a biopharmaceutical company, identifies, develops, and delivers therapies to people living with rare kidney and metabolic diseases. With the latest financial year loss of US$376m and a trailing-twelve-month loss of US$416m, the US$514m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Travere Therapeutics' investors mind, we've decided to gauge market sentiment. 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 Travere Therapeutics
According to the 14 industry analysts covering Travere Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$8.6m in 2026. The company is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 65% is expected, which is extremely buoyant. 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 Travere Therapeutics' upcoming projects, but, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. 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. Travere Therapeutics currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Travere Therapeutics 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 Travere Therapeutics, take a look at Travere Therapeutics' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Valuation: What is Travere Therapeutics 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 Travere Therapeutics 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 Travere Therapeutics’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.
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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.
