Yahoo Finance Zynerba Pharmaceuticals, Inc.'s (NASDAQ:ZYNE) Path To Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at Zynerba Pharmaceuticals, Inc.'s (NASDAQ:ZYNE) future prospects. Zynerba Pharmaceuticals, Inc. operates as a clinical stage specialty pharmaceutical company. The company’s loss has recently broadened since it announced a US$35m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$37m, moving it further away from breakeven. The most pressing concern for investors is Zynerba Pharmaceuticals' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Zynerba Pharmaceuticals
Zynerba Pharmaceuticals is bordering on breakeven, according to the 4 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$14m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Zynerba Pharmaceuticals' growth isn’t the focus of this broad overview, but, keep in mind that by and large 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.
Before we wrap up, there’s one aspect worth mentioning. Zynerba Pharmaceuticals currently has no debt on its balance sheet, which is rare for a loss-making pharma, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Zynerba Pharmaceuticals 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 Zynerba Pharmaceuticals, take a look at Zynerba Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
Valuation: What is Zynerba Pharmaceuticals 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 Zynerba Pharmaceuticals 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 Zynerba Pharmaceuticals’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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