With the business potentially at an important milestone, we thought we'd take a closer look at scPharmaceuticals Inc.'s (NASDAQ:SCPH) future prospects. scPharmaceuticals Inc., a pharmaceutical company, engages in the development and commercialization of various pharmaceutical products. The company’s loss has recently broadened since it announced a US$55m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$80m, moving it further away from breakeven. As path to profitability is the topic on scPharmaceuticals' 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.

View our latest analysis for scPharmaceuticals

scPharmaceuticals is bordering on breakeven, according to the 6 American Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$14m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. 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 70%, which signals high confidence from analysts. 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 scPharmaceuticals given that this is a high-level summary, but, bear 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 that a high 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 scPharmaceuticals is its debt-to-equity ratio of 166%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on scPharmaceuticals, so if you are interested in understanding the company at a deeper level, take a look at scPharmaceuticals' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

1. Valuation: What is scPharmaceuticals 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 scPharmaceuticals 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 scPharmaceuticals’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.