Percheron Therapeutics Limited (ASX:PER) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Percheron Therapeutics Limited engages in the research and development of novel antisense pharmaceuticals in Australia. The AU$104m market-cap company announced a latest loss of AU$12m on 30 June 2024 for its most recent financial year result. Many investors are wondering about the rate at which Percheron Therapeutics will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Percheron Therapeutics

According to the 3 industry analysts covering Percheron Therapeutics, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$6.2m in 2027. The company is therefore projected to breakeven around 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 10% year-on-year, on average, which seems relatively fair. However, if this rate turns out to be too buoyant, the company may become profitable later than analysts predict.

Underlying developments driving Percheron Therapeutics' growth isn’t the focus of this broad overview, however, keep in mind that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, a double-digit growth rate is not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. Percheron Therapeutics currently has no debt on its balance sheet, which is rare for a loss-making pharma, which typically has high 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 key fundamentals of Percheron Therapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Percheron Therapeutics, take a look at Percheron Therapeutics' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Historical Track Record: What has Percheron 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Percheron Therapeutics' board and the CEO’s background.
3. 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.