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Heron Therapeutics, Inc. (NASDAQ:HRTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Heron Therapeutics, Inc., a commercial-stage biotechnology company, engages in developing and commercializing therapeutic that enhances medical care. The US$352m market-cap company announced a latest loss of US$14m on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is Heron Therapeutics' 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.
Consensus from 3 of the American Biotechs analysts is that Heron Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$10m in 2026. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 57% 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 Heron Therapeutics' growth isn’t the focus of this broad overview, though, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Check out our latest analysis for Heron Therapeutics
One thing we would like to bring into light with Heron Therapeutics 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are key fundamentals of Heron 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 Heron Therapeutics, take a look at Heron Therapeutics' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
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Valuation: What is Heron 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 Heron 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 Heron 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.
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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.