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Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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$233m market-cap company’s loss lessened since it announced a US$97m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$54m, as it approaches breakeven. As path to profitability is the topic on Paratek Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 3 of the American Pharmaceuticals analysts is that Paratek Pharmaceuticals is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$11m in 2022. Therefore, the company is expected to breakeven just over a year from now. 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 64%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Paratek Pharmaceuticals' upcoming projects, but, take into account that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we would like to bring into light with Paratek Pharmaceuticals is it 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.
There are too many aspects of Paratek Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Paratek Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
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.
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.
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.
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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