We feel now is a pretty good time to analyse Phathom Pharmaceuticals, Inc.'s (NASDAQ:PHAT) business as it appears the company may be on the cusp of a considerable accomplishment. Phathom Pharmaceuticals, Inc., biopharmaceutical company, focuses on developing and commercializing treatments for gastrointestinal diseases. The company’s loss has recently broadened since it announced a US$202m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$339m, moving it further away from breakeven. As path to profitability is the topic on Phathom Pharmaceuticals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Phathom Pharmaceuticals

Consensus from 7 of the American Pharmaceuticals analysts is that Phathom Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2026, before turning a profit of US$96m in 2027. The company is therefore projected to breakeven around 2 years 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 51% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Phathom Pharmaceuticals' upcoming projects, though, bear in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. Phathom Pharmaceuticals currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Phathom 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 Phathom 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 Phathom 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.