We feel now is a pretty good time to analyse Ocugen, Inc.'s (NASDAQ:OCGN) business as it appears the company may be on the cusp of a considerable accomplishment. Ocugen, Inc., a clinical-stage biopharmaceutical company, focuses on the developing gene therapies to cure blindness diseases. The company’s loss has recently broadened since it announced a US$58m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$69m, moving it further away from breakeven. Many investors are wondering about the rate at which Ocugen will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Ocugen is bordering on breakeven, according to the 5 American Biotechs analysts. They expect the company to post a final loss in 2022, before turning a profit of US$15m in 2023. So, the company is predicted to breakeven just over a year from today. 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 74% 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.
We're not going to go through company-specific developments for Ocugen given that this is a high-level summary, but, keep in mind 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 1.3% 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.
This article is not intended to be a comprehensive analysis on Ocugen, so if you are interested in understanding the company at a deeper level, take a look at Ocugen's company page on Simply Wall St. We've also put together a list of important aspects you should further research:
Valuation: What is Ocugen 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 Ocugen 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 Ocugen’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.
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