Liquidia Corporation (NASDAQ:LQDA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Liquidia Corporation, a biopharmaceutical company, develops, manufactures, and commercializes various products for unmet patient needs in the United States. The company's loss has recently broadened since it announced a US$79m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$108m, moving it further away from breakeven. Many investors are wondering about the rate at which Liquidia will turn a profit, with the big question being "when will the company breakeven?" In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 7 industry analysts covering Liquidia, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$19m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
NasdaqCM:LQDA Earnings Per Share Growth June 4th 2024
Underlying developments driving Liquidia's growth isn't the focus of this broad overview, however, take into account that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there's one issue worth mentioning. Liquidia currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Liquidia's case is 98%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Liquidia, so if you are interested in understanding the company at a deeper level, take a look at Liquidia's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:
Valuation: What is Liquidia 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 Liquidia 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 Liquidia'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.