When Will Achieve Life Sciences, Inc. (NASDAQ:ACHV) Become Profitable?
With the business potentially at an important milestone, we thought we'd take a closer look at Achieve Life Sciences, Inc.'s (NASDAQ:ACHV) future prospects. Achieve Life Sciences, Inc., a late-stage pharmaceutical company, develops and commercializes cytisinicline for nicotine independence in Canada, the United States, and the United Kingdom. The US$250m market-cap company posted a loss in its most recent financial year of US$40m and a latest trailing-twelve-month loss of US$52m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Achieve Life Sciences' 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.
Consensus from 8 of the American Biotechs analysts is that Achieve Life Sciences is on the verge of breakeven. They anticipate the company to incur a final loss in 2027, before generating positive profits of US$47m in 2028. 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 58%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Achieve Life Sciences' upcoming projects, 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.
See our latest analysis for Achieve Life Sciences
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 29% 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 Achieve Life Sciences, so if you are interested in understanding the company at a deeper level, take a look at Achieve Life Sciences' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:
- Valuation: What is Achieve Life Sciences 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 Achieve Life Sciences is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Achieve Life Sciences’s board and the CEO’s background.
- 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.