Yahoo Finance When Will Aratana Therapeutics Inc (NASDAQ:PETX) Breakeven?
Aratana Therapeutics Inc’s (NASDAQ:PETX): Aratana Therapeutics, Inc., a pet therapeutics company, focuses on the licensing, development, and commercialization of therapeutics for dogs and cats in the United States and Belgium. The US$217.41m market-cap posted a loss in its most recent financial year of -US$47.51m and a latest trailing-twelve-month loss of -US$43.45m shrinking the gap between loss and breakeven. As path to profitability is the topic on PETX’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for PETX, its year of breakeven and its implied growth rate.
View out our latest analysis for Aratana Therapeutics
Expectation from Pharmaceuticals analysts is PETX is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$13.53m in 2020. PETX is therefore projected to breakeven around a couple of months from now! What rate will PETX have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 64.46%, 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, I won’t go into details of PETX’s upcoming projects, however, keep in mind that generally pharmaceuticals, 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.
One thing I’d like to point out is that PETX has managed its capital judiciously, with debt making up 35.52% of equity. This means that PETX 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 too many aspects of PETX to cover in one brief article, but the key fundamentals for the company can all be found in one place – PETX’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further examine:
Valuation: What is PETX 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 PETX 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 Aratana Therapeutics’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.