Yahoo Finance Heron Therapeutics, Inc.'s (NASDAQ:HRTX) Profit Outlook
With the business potentially at an important milestone, we thought we'd take a closer look at Heron Therapeutics, Inc.'s (NASDAQ:HRTX) future prospects. Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. The US$421m market-cap company announced a latest loss of US$111m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Heron Therapeutics will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Heron Therapeutics
Heron Therapeutics is bordering on breakeven, according to the 4 American Biotechs analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$30m in 2026. The company is therefore projected to breakeven around 2 years from today. 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 69%, which is rather optimistic! 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 Heron Therapeutics' upcoming projects, though, keep 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 issue worth mentioning. Heron Therapeutics currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
This article is not intended to be a comprehensive analysis on Heron Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Heron Therapeutics' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:
Valuation: What is Heron 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 Heron Therapeutics 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 Heron Therapeutics’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.
