Avadel Pharmaceuticals plc (NASDAQ:AVDL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Avadel Pharmaceuticals plc operates as a biopharmaceutical company in the United States. With the latest financial year loss of US$160m and a trailing-twelve-month loss of US$106m, the US$1.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Avadel Pharmaceuticals' 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.

Check out our latest analysis for Avadel Pharmaceuticals

Consensus from 9 of the American Pharmaceuticals analysts is that Avadel Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$57m in 2025. So, the company is predicted to breakeven just over a year from today. 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 62% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Avadel Pharmaceuticals given that this is a high-level summary, however, 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

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%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Avadel Pharmaceuticals' 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 Avadel Pharmaceuticals' 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.