Bausch Health Companies Inc. (NYSE:BHC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bausch Health Companies Inc. operates as a diversified specialty pharmaceutical and medical device company in the United States and internationally. The US$3.5b market-cap company posted a loss in its most recent financial year of US$592m and a latest trailing-twelve-month loss of US$178m shrinking the gap between loss and breakeven. The most pressing concern for investors is Bausch Health Companies' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.
Bausch Health Companies is bordering on breakeven, according to the 7 American Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of US$405m in 2025. The company is therefore projected 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 218%, which is extremely buoyant. 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 Bausch Health Companies given that this is a high-level summary, though, keep in mind that typically pharmaceuticals, 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.
Before we wrap up, there's one issue worth mentioning. Bausch Health Companies 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 Bausch Health Companies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bausch Health Companies' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:
- Valuation: What is Bausch Health Companies 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 Bausch Health Companies 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 Bausch Health Companies'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.
