With the business potentially at an important milestone, we thought we'd take a closer look at Alvotech's (NASDAQ:ALVO) future prospects. Alvotech, through its subsidiaries, develops and manufactures biosimilar medicines for patients worldwide. With the latest financial year loss of US$552m and a trailing-twelve-month loss of US$494m, the US$3.4b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Alvotech 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.

According to the 5 industry analysts covering Alvotech, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$100m in 2025. So, the company is predicted to breakeven just over a year 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 98% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Alvotech's growth isn't the focus of this broad overview, though, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Alvotech 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:

There are too many aspects of Alvotech to cover in one brief article, but the key fundamentals for the company can all be found in one place – Alvotech's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is Alvotech 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 Alvotech 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 Alvotech'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.

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