Biotech company BioCryst Pharmaceuticals, Inc. (BCRX - Get Rating), which specializes in oral and small molecule medications, is known for its diversified drug pipeline. The stock has gained 153.8% over the past year, and 60.1% year-to-date. The stock hit its $14.24 all-time high on March 22.

Growing investor interest in the bio-pharmaceuticals industry, combined with various technology innovations leading to breakthrough drug trials, have allowed BCRX to generate $19.10 million in revenues in the first quarter, ended March 31. This growth trajectory is expected to continue. Analysts expect the company’s top line to improve 478.5% in the current quarter (ending June 2021), and 3216.7% in the current year.

However, the company’s profitability is expected to remain low; the Street expects its EPS to remain negative until at least 2022.

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Here’s what we think could influence BCRX’s performance in the near term:

Impressive Growth Prospects

BCRX has successfully commercialized its oral medication ORLADEYO for treating hereditary angioedema. The drug received a positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines on February 26, following which it was approved for commercial use by the European Commission in April. The drug was also approved by the Japanese National Health Insurance system in the same month.

The company’s oral factor D inhibitor, which is designed to treat hemoglobin deficiency, completed successful proof of concept trials in March, and is currently conducting pivotal trials. If successful, the commercialization of the drug should mark a milestone in BCRX’s growth trajectory.

Bleak Financials

But despite having a$2.33 billion market valuation, BCRX generated $32.05 million in revenues over the past year. Also, the company has is yet to generate profits; its trailing-12-month net loss came in at $209.50 million. BCRX is bleeding cash from its operations, as is evident in its  negative $137.27 million trailing-12-month net operating cash flow.

The company’s trailing-12-month gross profit margin stood at negative 346.29%, while its trailing-12-month return on sales and levered free cash flow came in at negative 653.7% and 415.72%, respectively. The company’s trailing-12-month return on equity is negative 1925.37%.

Consensus Rating and Price Target Indicate Potential Upside

Of the 10 Wall Street analysts that rated BCRX, eight rated it Buy while two rated it Hold. The stock has $16.33 12-month median price target, which indicates  a 36.9% potential upside. The price targets range from a low of $11 to a high of $20.

POWR Ratings Reflect Uncertainty

BCRX has an overall rating of C, which equates to Neutral in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

The company has an F grade  for Stability, and C for Value. BCRX has a 2.66 beta, which is consistent with the Stability grade. Also,  the company’s 22.91 forward price/sales multiple is significantly higher than the 7.20 industry average, in sync with the Value grade.

Of the 491 stocks in the F-rated Biotech industry, BCRX is ranked #205. Beyond what we’ve stated above, one  can check out additional ratings for Growth, Sentiment, Quality and Momentum here.

Click here to view the top-rated stocks in the Biotech industry.

Bottom Line

BCRX’s innovative drug pipeline has been approved by agencies across the world. However, it is expected to take some time for BCRX to streamline its operations to generate profits. Thus, we think investors should wait for BCRX’s financials to stabilize before investing in the stock.

BCRX shares were trading at $12.14 per share on Tuesday afternoon, up $0.21 (+1.76%). Year-to-date, BCRX has gained 62.95%, versus a 11.15% rise in the benchmark S&P 500 index during the same period.

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