Market Sentiment Around Loss-Making Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS)

With the business potentially at an important milestone, we thought we'd take a closer look at Tarsus Pharmaceuticals, Inc.'s (NASDAQ:TARS) future prospects. Tarsus Pharmaceuticals, Inc., a commercial stage biopharmaceutical company, focuses on the development and commercialization of therapeutic candidates for eye care in the United States. With the latest financial year loss of US$116m and a trailing-twelve-month loss of US$81m, the US$3.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Tarsus Pharmaceuticals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Tarsus Pharmaceuticals is bordering on breakeven, according to the 8 American Pharmaceuticals analysts. They expect the company to post a final loss in 2025, before turning a profit of US$91m in 2026. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 63%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Tarsus Pharmaceuticals given that this is a high-level summary, though, keep in mind that by and large 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.

See our latest analysis for Tarsus Pharmaceuticals

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 22% 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:

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

1. Valuation: What is Tarsus 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 Tarsus 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 Tarsus 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.

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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.