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Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL): Are Analysts Optimistic?

editorial-team@simplywallst.com (Simply Wall St)
·3-min read

We feel now is a pretty good time to analyse Rigel Pharmaceuticals, Inc.'s (NASDAQ:RIGL) business as it appears the company may be on the cusp of a considerable accomplishment. Rigel Pharmaceuticals, Inc., a biotechnology company, engages in discovering, developing, and providing therapies that enhance the lives of patients with hematologic disorders and cancer. With the latest financial year loss of US$25m and a trailing-twelve-month loss of US$20m, the US$148m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Rigel Pharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Rigel Pharmaceuticals

According to the 6 industry analysts covering Rigel Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$13m in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Rigel Pharmaceuticals given that this is a high-level summary, but, take into account that typically 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.

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One thing we would like to bring into light with Rigel Pharmaceuticals is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are too many aspects of Rigel Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rigel Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

  1. Valuation: What is Rigel 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 Rigel 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 Rigel 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.

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.

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