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We feel now is a pretty good time to analyse NEXGEL, Inc.'s (NASDAQ:NXGL) business as it appears the company may be on the cusp of a considerable accomplishment. NEXGEL, Inc. manufactures and sells high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels for wound care, medical diagnostics, transdermal drug delivery, and cosmetics in the United States. With the latest financial year loss of US$3.2m and a trailing-twelve-month loss of US$3.5m, the US$27m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on NEXGEL's investors mind, we've decided to gauge market sentiment. 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 NEXGEL
NEXGEL is bordering on breakeven, according to some American Medical Equipment analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$528k in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? 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.
We're not going to go through company-specific developments for NEXGEL given that this is a high-level summary, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 21% 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:
There are too many aspects of NEXGEL to cover in one brief article, but the key fundamentals for the company can all be found in one place – NEXGEL's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:
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Historical Track Record: What has NEXGEL's 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 NEXGEL'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.