With the business potentially at an important milestone, we thought we'd take a closer look at Phathom Pharmaceuticals, Inc.'s (NASDAQ:PHAT) future prospects. Phathom Pharmaceuticals, Inc., a biopharmaceutical company, focuses on developing and commercializing treatments for gastrointestinal diseases. The company’s loss has recently broadened since it announced a US$334m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$346m, moving it further away from breakeven. Many investors are wondering about the rate at which Phathom Pharmaceuticals 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.
According to the 8 industry analysts covering Phathom Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$95m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% 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.
Underlying developments driving Phathom Pharmaceuticals' growth isn’t the focus of this broad overview, however, keep in mind that generally 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.
Check out our latest analysis for Phathom Pharmaceuticals
One thing we would like to bring into light with Phathom Pharmaceuticals is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are too many aspects of Phathom Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Phathom Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
- Valuation: What is Phathom 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 Phathom Pharmaceuticals 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 Phathom Pharmaceuticals’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.