With the business potentially at an important milestone, we thought we'd take a closer look at Fortress Biotech, Inc.'s (NASDAQ:FBIO) future prospects. Fortress Biotech, Inc., a biopharmaceutical company, develops and commercializes pharmaceutical and biotechnology products. On 31 December 2023, the US$37m market-cap company posted a loss of US$69m for its most recent financial year. Many investors are wondering about the rate at which Fortress Biotech 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 Fortress Biotech

According to the 3 industry analysts covering Fortress Biotech, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$2.9m 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 14%, which is relatively reasonable. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Fortress Biotech's growth isn’t the focus of this broad overview, though, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means a double-digit 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 Fortress Biotech is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. 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 too many aspects of Fortress Biotech to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fortress Biotech's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Historical Track Record: What has Fortress Biotech's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Fortress Biotech'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. 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.