With the business potentially at an important milestone, we thought we'd take a closer look at Zevra Therapeutics, Inc.'s (NASDAQ:ZVRA) future prospects. Zevra Therapeutics, Inc. discovers and develops various proprietary prodrugs to treat serious medical conditions in the United States. The company's loss has recently broadened since it announced a US$46m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$67m, moving it further away from breakeven. Many investors are wondering about the rate at which Zevra Therapeutics 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.

Consensus from 7 of the American Pharmaceuticals analysts is that Zevra Therapeutics is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$41m in 2026. The company is therefore projected to breakeven around 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 69%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Zevra Therapeutics' growth isn't the focus of this broad overview, however, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Zevra Therapeutics is its debt-to-equity ratio of 180%. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Zevra Therapeutics 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 Zevra Therapeutics, take a look at Zevra Therapeutics' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is Zevra Therapeutics 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 Zevra Therapeutics 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 Zevra Therapeutics'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.