Yahoo Finance Market Sentiment Around Loss-Making Evolus, Inc. (NASDAQ:EOLS)
We feel now is a pretty good time to analyse Evolus, Inc.'s (NASDAQ:EOLS) business as it appears the company may be on the cusp of a considerable accomplishment. Evolus, Inc., a performance beauty company, focuses on delivering products in the cash-pay aesthetic market in the United States, Canada, and Europe. The US$681m market-cap company posted a loss in its most recent financial year of US$62m and a latest trailing-twelve-month loss of US$60m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Evolus will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Evolus
According to the 7 industry analysts covering Evolus, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$47m in 2026. The company is therefore projected to breakeven around 2 years from now. 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 66% year-on-year, on average, 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 Evolus given that this is a high-level summary, but, keep in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. 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 issue worth mentioning. Evolus currently has a debt-to-equity ratio of over 2x. 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 too many aspects of Evolus to cover in one brief article, but the key fundamentals for the company can all be found in one place – Evolus' company page on Simply Wall St. We've also compiled a list of important aspects you should look at:
Valuation: What is Evolus 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 Evolus 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 Evolus’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
