Arrowhead Pharmaceuticals Inc’s (NASDAQ:ARWR) Path To Profitability

Arrowhead Pharmaceuticals Inc’s (NASDAQ:ARWR): Arrowhead Pharmaceuticals, Inc. develops medicines for the treatment of intractable diseases in the United States. The company’s loss has recently broadened since it announced a -US$34.38M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$44.33M, moving it further away from breakeven. Many investors are wondering the rate at which ARWR will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for ARWR.

View our latest analysis for Arrowhead Pharmaceuticals

Expectation from analysts is ARWR is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$37.20M in 2022. So, ARWR is predicted to breakeven approximately 4 years from today. In order to meet this breakeven date, I calculated the rate at which ARWR must grow year-on-year. It turns out an average annual growth rate of 45.44% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:ARWR Past Future Earnings Jun 20th 18

I’m not going to go through company-specific developments for ARWR given that this is a high-level summary, though, keep in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. ARWR has managed its capital prudently, with debt making up 2.14% of equity. This means that ARWR 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 ARWR which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ARWR, take a look at ARWR’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:

1. Historical Track Record: What has ARWR’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Arrowhead Pharmaceuticals’s board and the CEO’s back ground.

3. 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.