Trevena Inc (NASDAQ:TRVN): When Will It Breakeven?
Trevena Inc’s (NASDAQ:TRVN): Trevena, Inc., a biopharmaceutical company, develops various therapies based on breakthrough science to benefit patients and healthcare providers confronting serious medical conditions. The US$120.24M market-cap company’s loss lessens since it announced a -US$102.99M bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$93.24M, as it approaches breakeven. Many investors are wondering the rate at which TRVN will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for TRVN.
Check out our latest analysis for Trevena
According to the industry analysts covering TRVN, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$30.46M in 2021. So, TRVN is predicted to breakeven approximately 3 years from now. In order to meet this breakeven date, I calculated the rate at which TRVN must grow year-on-year. It turns out an average annual growth rate of 50.15% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into detail the detail of TRVN’s upcoming projects, but, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with TRVN is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in TRVN’s case is 60.03%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of TRVN to cover in one brief article, but the key fundamentals for the company can all be found in one place – TRVN’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:
Valuation: What is TRVN 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 TRVN 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 Trevena’s board and the CEO’s back ground.
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.
