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We feel now is a pretty good time to analyse Amicus Therapeutics, Inc.'s (NASDAQ:FOLD) business as it appears the company may be on the cusp of a considerable accomplishment. Amicus Therapeutics, Inc., a biotechnology company, focuses on discovering, developing, and delivering medicines for rare diseases. With the latest financial year loss of US$250m and a trailing-twelve-month loss of US$270m, the US$3.0b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Amicus Therapeutics' path to profitability – when will it 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 Amicus Therapeutics
According to the 12 industry analysts covering Amicus Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$139m in 2024. So, the company is predicted to breakeven approximately 2 years from today. 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 71%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Amicus Therapeutics' growth isn’t the focus of this broad overview, though, take into account that generally biotechs, 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. Amicus Therapeutics currently has a debt-to-equity ratio of 163%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Amicus Therapeutics 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 Amicus Therapeutics, take a look at Amicus Therapeutics' company page on Simply Wall St. We've also put together a list of key factors you should further research:
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Valuation: What is Amicus Therapeutics 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 Amicus Therapeutics is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Amicus Therapeutics’s board and the CEO’s background.
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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.