When Can We Expect A Profit From Anavex Life Sciences Corp. (NASDAQ:AVXL)? From 3 Jan 2022 Article.
We feel now is a pretty good time to analyse Anavex Life Sciences Corp.'s (NASDAQ:AVXL) business as it appears the company may be on the cusp of a considerable accomplishment. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of drug candidates for the treatment of central nervous system (CNS) diseases. On 30 September 2021, the US$1.3b market-cap company posted a loss of US$38m for its most recent financial year. As path to profitability is the topic on Anavex Life Sciences' investors mind, we've decided to gauge market sentiment. 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 2 industry analysts covering Anavex Life Sciences, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$6.8m in 2024. The company is therefore projected to breakeven around 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 55%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
 NasdaqGS:AVXL Earnings Per Share Growth January 3rd 2022 Underlying developments driving Anavex Life Sciences' growth isn’t the focus of this broad overview, though, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that Anavex Life Sciences has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps: There are too many aspects of Anavex Life Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Anavex Life Sciences' company page on Simply Wall St. We've also put together a list of key factors you should look at:
- Historical Track Record: What has Anavex Life Sciences' 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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Anavex Life Sciences' 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.
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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