We feel now is a pretty good time to analyse Alimera Sciences, Inc.'s (NASDAQ:ALIM) business as it appears the company may be on the cusp of a considerable accomplishment. Alimera Sciences, Inc., a pharmaceutical company, develops and commercializes prescription ophthalmic retinal pharmaceuticals. The US$301m market-cap company’s loss lessened since it announced a US$21m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$15m, as it approaches breakeven. Many investors are wondering about the rate at which Alimera Sciences will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Alimera Sciences

Alimera Sciences is bordering on breakeven, according to the 4 American Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of US$10m in 2025. Therefore, the company is expected 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 62% 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.

We're not going to go through company-specific developments for Alimera Sciences given that this is a high-level summary, however, take into account 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. 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 Alimera Sciences is its debt-to-equity ratio of 180%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Alimera Sciences 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 Alimera Sciences 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 Alimera Sciences’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.