We feel now is a pretty good time to analyse Verrica Pharmaceuticals Inc.'s (NASDAQ:VRCA) business as it appears the company may be on the cusp of a considerable accomplishment. Verrica Pharmaceuticals Inc., a clinical-stage dermatology therapeutics company, develops medications for the treatment of skin diseases in the United States. The US$120m market-cap company posted a loss in its most recent financial year of US$67m and a latest trailing-twelve-month loss of US$87m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Verrica Pharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Verrica Pharmaceuticals

According to the 6 industry analysts covering Verrica Pharmaceuticals, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$2.0m in 2026. The company is therefore projected to breakeven around 2 years 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 68% 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.

Given this is a high-level overview, we won’t go into details of Verrica Pharmaceuticals' upcoming projects, but, keep in mind 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.

Before we wrap up, there’s one issue worth mentioning. Verrica Pharmaceuticals currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

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There are key fundamentals of Verrica Pharmaceuticals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Verrica Pharmaceuticals, take a look at Verrica Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine: