Yahoo Finance When Will Amicus Therapeutics, Inc. (NASDAQ:FOLD) Become Profitable?
Amicus Therapeutics, Inc. (NASDAQ:FOLD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Amicus Therapeutics, Inc., a biotechnology company, focuses on discovering, developing, and delivering medicines for rare diseases. On 31 December 2023, the US$3.1b market-cap company posted a loss of US$152m for its most recent financial year. The most pressing concern for investors is Amicus Therapeutics' 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.
Check out our latest analysis for Amicus Therapeutics
According to the 11 industry analysts covering Amicus Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$121m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 55% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Amicus Therapeutics' upcoming projects, though, take into account that typically 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 would like to bring into light with Amicus Therapeutics is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Amicus Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Amicus Therapeutics' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:
Valuation: What is Amicus 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 Amicus 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 Amicus 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.
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.
