When Will Aquestive Therapeutics, Inc. (NASDAQ:AQST) Become Profitable?

[view original post]

We feel now is a pretty good time to analyse Aquestive Therapeutics, Inc.’s (NASDAQ:AQST) business as it appears the company may be on the cusp of a considerable accomplishment. Aquestive Therapeutics, Inc., a pharmaceutical company, focuses on identifying, developing, and commercializing various products to address unmet medical needs in the United States and internationally. With the latest financial year loss of US$71m and a trailing-twelve-month loss of US$69m, the US$52m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Aquestive Therapeutics’ 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.

Check out our latest analysis for Aquestive Therapeutics

Consensus from 4 of the American Pharmaceuticals analysts is that Aquestive Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$7.8m in 2024. The company is therefore projected to breakeven around 2 years 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 69% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

We’re not going to go through company-specific developments for Aquestive Therapeutics given that this is a high-level summary, however, bear in mind that typically pharmaceuticals, 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. Aquestive Therapeutics 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 too many aspects of Aquestive Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Aquestive Therapeutics’ company page on Simply Wall St. We’ve also compiled a list of key factors you should look at:

  1. Valuation: What is Aquestive 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 Aquestive Therapeutics is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aquestive Therapeutics’s board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.