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Neos Therapeutics, Inc. (NASDAQ:NEOS) Is Expected To Breakeven In The Near Future

Simply Wall St
·3 min read

We feel now is a pretty good time to analyse Neos Therapeutics, Inc.'s (NASDAQ:NEOS) business as it appears the company may be on the cusp of a considerable accomplishment. Neos Therapeutics, Inc., a pharmaceutical company, develops, manufactures, and commercializes products for the treatment of attention deficit hyperactivity disorder (ADHD) using its drug delivery technology platform. The company’s loss has recently broadened since it announced a US$17m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$19m, moving it further away from breakeven. As path to profitability is the topic on Neos Therapeutics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Neos Therapeutics

Neos Therapeutics is bordering on breakeven, according to the 4 American Pharmaceuticals analysts. They expect the company to post a final loss in 2021, before turning a profit of US$14m in 2022. 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 69% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Neos Therapeutics given that this is a high-level summary, however, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. 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 Neos Therapeutics is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Neos Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Neos Therapeutics' company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

  1. Valuation: What is Neos 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 Neos 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 Neos 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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