Humanigen, Inc. (NASDAQ:HGEN) On The Verge Of Breaking Even
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HGEN
+3.74%
Simply Wall St
Fri, March 12, 2021, 1:30 AM
More content below
HGEN
+3.74%
We feel now is a pretty good time to analyse Humanigen, Inc.'s (NASDAQ:HGEN) business as it appears the company may be on the cusp of a considerable accomplishment. Humanigen, Inc., a clinical stage biopharmaceutical company, develops proprietary monoclonal antibodies for immunotherapy and oncology treatments. The US$849m market-cap company announced a latest loss of US$90m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on Humanigen's investors mind, we've decided to gauge market sentiment. 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 Humanigen
Humanigen is bordering on breakeven, according to the 7 American Biotechs analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$255m in 2021. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 7.5% year-on-year, on average, which is fair. If this rate turns out to be too low, the company may become profitable faster than analysts expect.
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We're not going to go through company-specific developments for Humanigen given that this is a high-level summary, however, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Humanigen has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Humanigen 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 Humanigen, take a look at Humanigen's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
Valuation: What is Humanigen 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 Humanigen 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 Humanigen’s board and the CEO’s background.
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 (at) simplywallst.com.
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