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Scholar Rock Holding Corporation (NASDAQ:SRRK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Scholar Rock Holding Corporation, a biopharmaceutical company, focuses on the discovery, development, and delivery of medicines for the treatment of serious diseases in which signaling by protein growth factors plays a fundamental role. On 31 December 2024, the US$3.5b market-cap company posted a loss of US$246m for its most recent financial year. As path to profitability is the topic on Scholar Rock Holding's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Scholar Rock Holding
According to the 9 industry analysts covering Scholar Rock Holding, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$162k in 2027. Therefore, the company is expected to breakeven roughly 2 years 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 62%, 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 Scholar Rock Holding's upcoming projects, however, bear in mind 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 14% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Scholar Rock Holding, so if you are interested in understanding the company at a deeper level, take a look at Scholar Rock Holding's company page on Simply Wall St. We've also compiled a list of key factors you should further research:
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Valuation: What is Scholar Rock Holding 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 Scholar Rock Holding 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 Scholar Rock Holding’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.
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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.