We feel now is a pretty good time to analyse Newron Pharmaceuticals S.p.A.’s (VTX:NWRN) business as it appears the company may be on the cusp of a considerable accomplishment. Newron Pharmaceuticals S.p.A., a biopharmaceutical company, focus on the development of novel therapies for the treatment of central nervous system (CNS) and pain in Italy and the United States. With the latest financial year loss of €17m and a trailing-twelve-month loss of €16m, the CHF89m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Newron Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company’s growth and when analysts expect it to become profitable.
According to the 3 industry analysts covering Newron Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of €5.2m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 60% is expected, 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 Newron Pharmaceuticals’ growth isn’t the focus of this broad overview, though, 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one issue worth mentioning. Newron Pharmaceuticals currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are too many aspects of Newron Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Newron Pharmaceuticals’ company page on Simply Wall St. We’ve also put together a list of important factors you should look at:
Valuation: What is Newron 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 Newron 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 Newron 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.
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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.