With the business potentially at an important milestone, we thought we'd take a closer look at Aytu BioPharma, Inc.'s (NASDAQ:AYTU) future prospects. Aytu Biopharma, Inc., a commercial-stage pharmaceutical company, focuses on commercializing novel therapeutics and consumer healthcare products the United States and internationally. The US$14m market-cap company’s loss lessened since it announced a US$17m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$14m, as it approaches breakeven. As path to profitability is the topic on Aytu BioPharma's 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.

Check out our latest analysis for Aytu BioPharma

Aytu BioPharma is bordering on breakeven, according to some American Pharmaceuticals analysts. They expect the company to post a final loss in 2024, before turning a profit of US$3.9m in 2025. So, the company is predicted to breakeven just over a year 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 96% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Aytu BioPharma's upcoming projects, though, take into account that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Aytu BioPharma currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Aytu BioPharma's case is 54%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Aytu BioPharma to cover in one brief article, but the key fundamentals for the company can all be found in one place – Aytu BioPharma's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Valuation: What is Aytu BioPharma 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 Aytu BioPharma 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 Aytu BioPharma’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.