Alimera Sciences, Inc.'s (NASDAQ:ALIM) Profit Outlook
With the business potentially at an important milestone, we thought we'd take a closer look at Alimera Sciences, Inc.'s (NASDAQ:ALIM) future prospects. Alimera Sciences, Inc., a pharmaceutical company, engages in the development and commercialization of ophthalmic pharmaceuticals. The company’s loss has recently broadened since it announced a US$18m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$25m, moving it further away from breakeven. Many investors are wondering about the rate at which Alimera Sciences will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Alimera Sciences
According to the 3 industry analysts covering Alimera 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$7.6m in 2024. So, the company is predicted to breakeven just over a year 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 114%, 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.
Given this is a high-level overview, we won’t go into details of Alimera Sciences' upcoming projects, but, take into account that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we would like to bring into light with Alimera Sciences is its debt-to-equity ratio of 138%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Alimera Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Alimera Sciences' company page on Simply Wall St. We've also put together a list of key aspects you should further research:
Historical Track Record: What has Alimera 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 Alimera 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.
