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Iterum Therapeutics plc (NASDAQ:ITRM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Iterum Therapeutics plc, a pharmaceutical company, develops and commercializes treatments for drug resistant bacterial infections in Ireland, Bermuda, and the United States. On 31 December 2024, the US$35m market-cap company posted a loss of US$25m for its most recent financial year. The most pressing concern for investors is Iterum Therapeutics' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 2 industry analysts covering Iterum Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$9.4m in 2027. So, the company is predicted to breakeven approximately 2 years from now. 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 65% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Iterum Therapeutics' upcoming projects, however, bear in mind that generally 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.
See our latest analysis for Iterum Therapeutics
One thing we would like to bring into light with Iterum Therapeutics 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of Iterum Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Iterum Therapeutics' company page on Simply Wall St. We've also put together a list of key aspects you should further research:
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Historical Track Record: What has Iterum Therapeutics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Iterum Therapeutics' board and the CEO’s background.
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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.