Yahoo Finance When Can We Expect A Profit From PolarityTE, Inc. (NASDAQ:PTE)?
With the business potentially at an important milestone, we thought we'd take a closer look at PolarityTE, Inc.'s (NASDAQ:PTE) future prospects. PolarityTE, Inc., a clinical stage biotechnology company, develops and commercializes a range of regenerative tissue products and biomaterials for the fields of medicine, biomedical engineering, and material sciences in the United States. The US$4.5m market-cap company posted a loss in its most recent financial year of US$30m and a latest trailing-twelve-month loss of US$16m shrinking the gap between loss and breakeven. The most pressing concern for investors is PolarityTE's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for PolarityTE
PolarityTE is bordering on breakeven, according to the 2 American Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of US$43m in 2025. Therefore, the company is expected to breakeven roughly 2 years 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 61% 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.
Given this is a high-level overview, we won’t go into details of PolarityTE's upcoming projects, though, bear in mind that typically 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 we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 2.0% 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.
Next Steps:
This article is not intended to be a comprehensive analysis on PolarityTE, so if you are interested in understanding the company at a deeper level, take a look at PolarityTE's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
Historical Track Record: What has PolarityTE'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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on PolarityTE'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.
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