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Mithra Pharmaceuticals SA.’s (ENXTBR:MITRA): Mithra Pharmaceuticals S.A. develops, manufactures, and markets complex therapeutics primarily for treating women’s fertility, contraception, and menopause needs in Belgium, the Netherlands, Luxembourg, and internationally. The €874.18M market-cap company announced a latest loss of -€35.01M on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which MITRA will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for MITRA’s growth and when analysts expect the company to become profitable.
See our latest analysis for Mithra Pharmaceuticals
MITRA is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2017, before turning a profit of €3.47M in 2018. Therefore, MITRA is expected to breakeven roughly a couple of months from now! How fast will MITRA have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 141.83% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, MITRA may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of MITRA’s upcoming projects, but, keep in mind that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one issue worth mentioning. MITRA currently has a debt-to-equity ratio of 137.53%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and MITRA has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of MITRA which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at MITRA, take a look at MITRA’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:
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Historical Track Record: What has MITRA’s 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 Mithra Pharmaceuticals’s board and the CEO’s back ground.
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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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.