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MeiraGTx Holdings plc (NASDAQ:MGTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MeiraGTx Holdings plc, a clinical stage genetics medicines company, focusing on developing treatments for patients with serious diseases. On 31 December 2024, the US$596m market-cap company posted a loss of US$148m for its most recent financial year. The most pressing concern for investors is MeiraGTx Holdings' 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.
Consensus from 3 of the American Biotechs analysts is that MeiraGTx Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$20m in 2026. So, the company is predicted to breakeven just over a year 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 43%, 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.
We're not going to go through company-specific developments for MeiraGTx Holdings given that this is a high-level summary, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Check out our latest analysis for MeiraGTx Holdings
One thing we would like to bring into light with MeiraGTx Holdings is its debt-to-equity ratio of 108%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on MeiraGTx Holdings, so if you are interested in understanding the company at a deeper level, take a look at MeiraGTx Holdings' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
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Historical Track Record: What has MeiraGTx Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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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 MeiraGTx Holdings' 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.