When will Spero Therapeutics, Inc. (NASDAQ:SPRO) make a profit?


With the company potentially at an important stage, we thought we’d take a closer look Spero Therapeutics, Inc. (NASDAQ: SPRO) future prospects. Spero Therapeutics, Inc., a clinical-stage biopharmaceutical company, is focused on identifying, developing and commercializing novel treatments for multidrug-resistant (MDR) bacterial infections and rare diseases in the United States. With the last loss of $79 million in the fiscal year and a loss of $79 million in the last twelve months, the $337 million market capitalization company has magnified its loss by moving further away from its balance goal. Since the path to profitability is what Spero Therapeutics investors are concerned about, we decided to gauge market sentiment. Below, we’ll provide a high-level summary of industry analysts’ expectations for the company.

According to the 5 industry analysts covering Spero Therapeutics, the consensus is that the break-even point is near. They expect the business to make a terminal loss in 2023, before making a profit of US$73 million in 2024. Therefore, the business is expected to break even in about 2 years. How fast will the business need to grow year over year to break even by that date? Using a line of best fit, we calculated an average annual growth rate of 64%, which signals high confidence from analysts. If the business grows at a slower rate, it will become profitable later than expected.

NasdaqGS: SPRO Earnings Per Share Growth February 10, 2022

We’re not going to review company-specific developments for Spero Therapeutics since this is a high-level summary, but keep in mind that overall a biotech has irregular cash flows that depend on the type of product and the stage of development in which the company is. This means that the significant growth rates ahead are not abnormal as the company begins to reap the benefits of past investments.

Before concluding, there is one aspect worth mentioning. Spero Therapeutics currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt to equity ratios. The company currently operates solely on shareholder funding and has no debt, reducing concerns about repayments and making it a less risky investment.

Next steps:

There are too many aspects of Spero Therapeutics to cover in a brief article, but the company fundamentals can all be found in one place – the Spero Therapeutics company page on Simply Wall St. We have also compiled a list of key aspects you should consider in more detail:

  1. Evaluation: What is Spero Therapeutics worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Spero Therapeutics is currently being mispriced by the market.
  2. Management team: An experienced management team at the helm boosts our confidence in the company – take a look at who sits on the Spero Therapeutics Board of Directors and the CEO’s background.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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