With the business potentially at an important milestone, we thought we'd take a closer look at Zevra Therapeutics, Inc.'s (NASDAQ:ZVRA) future prospects. Zevra Therapeutics, Inc. discovers and develops various proprietary prodrugs to treat serious medical conditions in the United States. With the latest financial year loss of US$46m and a trailing-twelve-month loss of US$90m, the US$458m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Zevra Therapeutics' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Zevra Therapeutics

Consensus from 8 of the American Pharmaceuticals analysts is that Zevra Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$42m in 2026. The company is therefore projected to breakeven around 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 73% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Zevra Therapeutics' growth isn’t the focus of this broad overview, but, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business 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 would like to bring into light with Zevra Therapeutics is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Zevra Therapeutics' case is 84%. A higher level of debt requires more stringent capital management which 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 essential factors you should look at:

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.

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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.