Paratek Pharmaceuticals, Inc.'s (NASDAQ:PRTK) Profit Outlook

We feel now is a pretty good time to analyse Paratek Pharmaceuticals, Inc.'s (NASDAQ:PRTK) business as it appears the company may be on the cusp of a considerable accomplishment. Paratek Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of life-saving therapies for life-threatening diseases or other public health threats for civilian, government, and military use. The US$148m market-cap company announced a latest loss of US$59m on 31 December 2021 for its most recent financial year result. The most pressing concern for investors is Paratek Pharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Paratek Pharmaceuticals

According to the 3 industry analysts covering Paratek Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$23m in 2023. So, the company is predicted to breakeven just over a year 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 55% 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.

earnings-per-share-growth

Underlying developments driving Paratek Pharmaceuticals' growth isn’t the focus of this broad overview, but, bear in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Paratek Pharmaceuticals 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 Paratek Pharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at Paratek Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

1. Historical Track Record: What has Paratek Pharmaceuticals' 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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Paratek Pharmaceuticals' 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.