Analysts are optimistic we will see a profit from Procaps Group SA (NASDAQ:PROC)

We think it’s a good time to analyze Procaps Group SA (NASDAQ: PROC) As it seems, the company may be on the verge of a huge achievement. Procaps Group SA develops, produces and markets pharmaceutical solutions worldwide. With the last loss of $101 million in the fiscal year and a loss of $67 million in the last twelve months, the $970 million market capitalization company has mitigated its loss by approaching its target of ‘balance. As the path to profitability is the subject of concern for Procaps Group investors, we decided to assess market sentiment. Below, we’ll provide a high-level summary of industry analysts’ expectations for the company.

See our latest analysis for Procaps Group

Procaps Group is close to equilibrium, according to the 2 American analysts of Pharmaceuticals. They predict the business will incur a terminal loss in 2021, before generating positive profits of US$46 million in 2022. So the business should break even in about a year or less! We calculated the rate at which the business must grow to reach the consensus forecast predicting breakeven within 12 months. It turns out that an average annual growth rate of 119% is expected, which is extremely sustained. If the business grows at a slower rate, it will become profitable later than expected.

earnings per share growth

Since this is a high-level overview, we won’t go into details about Procaps Group’s upcoming plans, however, keep in mind that in general, a pharmaceutical company has streams irregular cash flow that depend on the drug and the stage of product development that the company is. Thus, a high growth rate is not unusual, especially when a company is in a period of investment.

One thing we would like to highlight with Procaps Group is that it currently has negative equity on its balance sheet. The accounting methods used to deal with losses accumulated over time can cause this. In effect, liabilities are carried forward into the future until they cancel out. These losses tend to only occur on paper, however, in other cases, it may be a warning.

Next steps:

There are too many aspects of Procaps Group to cover in a short article, but key business fundamentals can all be found in one place – Procaps Group company page on Simply Wall St. We have also compiled a list of relevant factors that you should investigate further:

  1. Evaluation: What is Procaps Group worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report allows you to see if Procaps Group is currently poorly valued by the market.

  2. Management team: An experienced management team at the helm boosts our confidence in the business – take a look at who sits on the board of directors of Procaps 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.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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