We Might See A Profit From ADMA Biologics, Inc. (NASDAQ:ADMA) Soon
With the business potentially at an important milestone, we thought we'd take a closer look at ADMA Biologics, Inc.'s (NASDAQ:ADMA) future prospects. ADMA Biologics, Inc., a biopharmaceutical company, engages in developing, manufacturing, and marketing specialty plasma-derived biologics for the treatment of immune deficiencies and infectious diseases in the United States and internationally. With the latest financial year loss of US$28m and a trailing-twelve-month loss of US$3.6m, the US$2.8b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which ADMA Biologics will turn a profit, with the big question being “when will the company 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 ADMA Biologics
ADMA Biologics is bordering on breakeven, according to the 4 American Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$83m in 2024. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 32% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving ADMA Biologics' growth isn’t the focus of this broad overview, though, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company 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 ADMA Biologics is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ADMA Biologics' case is 85%. 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 key fundamentals of ADMA Biologics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at ADMA Biologics, take a look at ADMA Biologics' company page on Simply Wall St. We've also put together a list of key aspects you should look at:
Valuation: What is ADMA Biologics 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 ADMA Biologics 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 ADMA Biologics’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com