Yahoo Finance Market Sentiment Around Loss-Making Provention Bio, Inc. (NASDAQ:PRVB)
Provention Bio, Inc. (NASDAQ:PRVB) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Provention Bio, Inc., a clinical stage biopharmaceutical company, focuses on the development and commercialization of therapeutics and solutions to intercept and prevent immune-mediated diseases. The US$779m market-cap company’s loss lessened since it announced a US$114m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$106m, as it approaches breakeven. The most pressing concern for investors is Provention Bio's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Provention Bio
Consensus from 8 of the American Pharmaceuticals analysts is that Provention Bio is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$43m in 2025. 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 47% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Provention Bio given that this is a high-level summary, however, bear 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.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 16% 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 Provention Bio 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 Provention Bio, take a look at Provention Bio's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
Valuation: What is Provention Bio 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 Provention Bio 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 Provention Bio’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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