We feel now is a pretty good time to analyse Zevra Therapeutics, Inc.'s (NASDAQ:ZVRA) business as it appears the company may be on the cusp of a considerable accomplishment. Zevra Therapeutics, Inc. discovers and develops various proprietary prodrugs to treat serious medical conditions in the United States. The US$379m market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$67m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Zevra Therapeutics' path to profitability – when will it 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 Zevra Therapeutics

According to the 8 industry analysts covering Zevra Therapeutics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$43m in 2026. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 70% is expected, 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.

We're not going to go through company-specific developments for Zevra Therapeutics given that this is a high-level summary, though, keep in mind that generally 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.

Before we wrap up, there’s one issue worth mentioning. Zevra Therapeutics currently has a debt-to-equity ratio of 180%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Zevra 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 Zevra Therapeutics, take a look at Zevra Therapeutics' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is Zevra Therapeutics 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 Zevra Therapeutics is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Zevra Therapeutics’s 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.

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.