When Will BeiGene, Ltd. (NASDAQ:BGNE) Become Profitable?
BeiGene, Ltd. (NASDAQ:BGNE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. BeiGene Ltd., an oncology company, engages in discovering and developing various treatments for cancer patients in the United States, China, Europe, and internationally. The US$15b market-cap company’s loss lessened since it announced a US$882m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$784m, as it approaches breakeven. As path to profitability is the topic on BeiGene's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for BeiGene
Consensus from 28 of the American Biotechs analysts is that BeiGene is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$222m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 60% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for BeiGene given that this is a high-level summary, however, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 31% 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:
This article is not intended to be a comprehensive analysis on BeiGene, so if you are interested in understanding the company at a deeper level, take a look at BeiGene's company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is BeiGene 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 BeiGene 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 BeiGene’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com