We feel now is a pretty good time to analyse Ardelyx, Inc.'s (NASDAQ:ARDX) business as it appears the company may be on the cusp of a considerable accomplishment. Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. On 31 December 2023, the US$1.9b market-cap company posted a loss of US$66m for its most recent financial year. As path to profitability is the topic on Ardelyx's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts' expectations for the company.

Consensus from 9 of the American Biotechs analysts is that Ardelyx is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$742k in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 61% year-on-year, on average, 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 Ardelyx's upcoming projects, though, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. 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 The company has managed its capital judiciously, with debt making up 30% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Ardelyx, so if you are interested in understanding the company at a deeper level, take a look at Ardelyx's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Ardelyx 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 Ardelyx 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 Ardelyx'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.

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