We feel now is a pretty good time to analyse Ardelyx, Inc.'s (NASDAQ:ARDX) business as it appears the company may be on the cusp of a considerable accomplishment. Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. With the latest financial year loss of US$66m and a trailing-twelve-month loss of US$73m, the US$1.1b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Ardelyx's path to profitability – when will it 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 10 industry analysts covering Ardelyx, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$113m in 2026. The company is therefore projected to breakeven around 2 years from today. 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 70% year-on-year, on average, 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 Ardelyx's upcoming projects, however, take into account that by and large biotechs, 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. Ardelyx currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Ardelyx's case is 79%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Ardelyx which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Ardelyx, take a look at Ardelyx's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Valuation: What is Ardelyx 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 Ardelyx 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 Ardelyx'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.

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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.