Alpha Cognition Inc. (CVE:ACOG): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Alpha Cognition Inc.'s (CVE:ACOG) future prospects. Alpha Cognition Inc., a clinical stage biopharmaceutical company, focuses on developing treatments for Alzheimer’s disease and amyotrophic lateral sclerosis (ALS). With the latest financial year loss of US$20m and a trailing-twelve-month loss of US$13m, the CA$23m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Alpha Cognition's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Alpha Cognition

Alpha Cognition is bordering on breakeven, according to the 2 Canadian Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$10m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, 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.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Alpha Cognition's upcoming projects, but, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 27% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Alpha Cognition 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 Alpha Cognition, take a look at Alpha Cognition's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

  1. Valuation: What is Alpha Cognition 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 Alpha Cognition 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 Alpha Cognition’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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