When can we expect a profit from Diurnal Group plc (LON: DNL)?

Daytime Group plc (LON: DNL) Perhaps a major achievement in his business is approaching, so we would like to shed some light on the business. Diurnel Group plc operates as a specialty pharmaceutical company worldwide. On June 30, 2021, the £ 107million market-capitalization company recorded a loss of £ 10million in its most recent financial year. The most pressing concern for investors is Diurnal Group’s profitability trajectory – when will it break even? In this article, we’ll discuss the company’s growth expectations and when analysts expect it to become profitable.

See our latest analysis for Diurne Group

The consensus of 5 British Biotechs analysts is that Diurnal Group is on the verge of breaking even. They predict the company will experience a terminal loss in 2023, before generating positive profits of £ 12million in 2024. Therefore, the company is expected to break even in around 2 years. How fast will the company have to grow from one year to the next to reach equilibrium on that date? Using a line of best fit, we calculated an average annual growth rate of 67%, which is pretty optimistic! If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

earnings per share growth

We will not go over company specific developments for Diurnal Group as this is a high level summary, however, keep in mind that in general a biotechnology has Lumpy cash flow that depends on the type of product and the stage of development the product is in place. Thus, a high growth rate is not unusual, especially when a company is in the period of investment.

One thing we would like to point out is that Diurnal Group has no debt on its balance sheet, which is quite unusual for a money-burning biotech, which typically has high debt relative to its equity. The company currently operates solely on funding from its shareholders and is debt free, reducing concerns about repayments and making it a less risky investment.

Next steps:

This article is not intended to be a full analysis on Diurnal Group, so if you’re interested in understanding the business on a deeper level, take a look at The Diurne Group company page on Simply Wall St. We’ve also compiled a list of relevant factors that you should take a closer look at:

  1. Evaluation: What is Diurne Group worth today? Has the potential for future growth already been factored into the price? the intrinsic value infographic in our free research report helps to visualize whether Diurnal Group is currently poorly valued by the market.

  2. Management team: An experienced management team at the helm increases our confidence in the company – take a look at who sits on the board of directors of Diurnal Group and the experience of the CEO.

  3. Other high performing stocks: Are there other stocks that offer better prospects with a proven track record? Discover our free list of these great stocks here.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to 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 using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

About Margie Peters

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