Loss-Making Avadel Pharmaceuticals plc (NASDAQ:AVDL) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at Avadel Pharmaceuticals plc's (NASDAQ:AVDL) future prospects. Avadel Pharmaceuticals plc operates as a biopharmaceutical company in the United States. The US$742m market-cap company announced a latest loss of US$49m on 31 December 2024 for its most recent financial year result. As path to profitability is the topic on Avadel Pharmaceuticals' 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.

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According to the 10 industry analysts covering Avadel Pharmaceuticals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$15m in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 48% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Avadel Pharmaceuticals' upcoming projects, though, 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Avadel Pharmaceuticals

One thing we would like to bring into light with Avadel Pharmaceuticals is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Avadel Pharmaceuticals' case is 50%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Avadel Pharmaceuticals 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 Avadel Pharmaceuticals, take a look at Avadel Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

1. Valuation: What is Avadel Pharmaceuticals 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 Avadel Pharmaceuticals 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 Avadel Pharmaceuticals’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.