Camurus AB (publ)'s (STO:CAMX): Camurus AB (publ), a pharmaceutical company, develops and commercializes pharmaceuticals for serious and chronic conditions in Europe, North America, and Asia. On 31 December 2019, the kr3.4b market-cap posted a loss of -kr289.9m for its most recent financial year. Many investors are wondering the rate at which CAMX will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for CAMX, its year of breakeven and its implied growth rate.
CAMX is bordering on breakeven, according to the 2 Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr162m in 2022. So, CAMX is predicted to breakeven approximately 2 years from today. What rate will CAMX 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 63%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for CAMX given that this is a high-level summary, though, bear in mind that generally 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 I’d like to point out is that CAMX has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. CAMX currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of CAMX to cover in one brief article, but the key fundamentals for the company can all be found in one place – CAMX’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:
- Valuation: What is CAMX 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 CAMX 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 Camurus’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.
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