With the business potentially at an important milestone, we thought we'd take a closer look at Futura Medical plc's (LON:FUM) future prospects. Futura Medical plc research, develops, and sells pharmaceutical and healthcare products for sexual health. The UK￡101m market-cap company posted a loss in its most recent financial year of UK￡6.5m and a latest trailing-twelve-month loss of UK￡3.8m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Futura Medical will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Futura Medical

According to the 3 industry analysts covering Futura Medical, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of UK￡515k in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 188%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Futura Medical's upcoming projects, but, keep in mind that generally 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’d like to point out is that Futura Medical has no debt on its balance sheet, which is quite unusual for a cash-burning 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 too many aspects of Futura Medical to cover in one brief article, but the key fundamentals for the company can all be found in one place – Futura Medical's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Futura Medical 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 Futura Medical 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 Futura Medical’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.