Avadel Pharmaceuticals plc (NASDAQ:AVDL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Avadel Pharmaceuticals plc operates as a biopharmaceutical company in the United States. The US$1.6b market-cap company announced a latest loss of US$160m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Avadel Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to the 9 industry analysts covering Avadel Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$91m in 2025. Therefore, the company is expected 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 57%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of Avadel Pharmaceuticals' upcoming projects, but, take into account 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 37% 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:

There are key fundamentals of Avadel Pharmaceuticals 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 Avadel Pharmaceuticals, take a look at Avadel Pharmaceuticals' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Avadel Pharmaceuticals 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 Avadel Pharmaceuticals 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 Avadel Pharmaceuticals'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.