Breakeven On The Horizon For Zevra Therapeutics, Inc. (NASDAQ:ZVRA)

We feel now is a pretty good time to analyse Zevra Therapeutics, Inc.'s (NASDAQ:ZVRA) business as it appears the company may be on the cusp of a considerable accomplishment. Zevra Therapeutics, Inc. discovers and develops various proprietary prodrugs to treat serious medical conditions in the United States. The US$190m market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$49m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Zevra Therapeutics' 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.

See our latest analysis for Zevra Therapeutics

Zevra Therapeutics is bordering on breakeven, according to the 6 American Pharmaceuticals analysts. They expect the company to post a final loss in 2025, before turning a profit of US$34m in 2026. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 65%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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We're not going to go through company-specific developments for Zevra Therapeutics given that this is a high-level summary, though, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Zevra Therapeutics is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Zevra Therapeutics' case is 88%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Zevra Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Zevra Therapeutics' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Zevra 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 Zevra Therapeutics is currently mispriced by the market.

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

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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com