On Tuesday, Ascendiant Capital maintained its Buy rating on 60 Degrees Pharmaceuticals Inc (NASDAQ:SXTP), with a steady price target of $1.30. The firm's analysis highlighted the company's first-quarter performance, which surpassed expectations due to strong gross profit and beneficial non-operating items.
The gross profit for the quarter was reported at $81,000, exceeding Ascendiant Capital's projections and signaling that 60 Degrees' ARAKODA for Malaria has reached a profitable scale.
Operating expenses for the quarter were higher than anticipated, totaling $1.8 million compared to the estimated $700,000. However, non-operating items compensated for the increased expenses, contributing to a net profit of $309,000. This positive financial outcome has led to an adjustment of future earnings estimates.
Ascendiant Capital has raised its FY24 earnings per share (EPS) estimate to $(0.54) from the previous $(0.61), citing a higher share count as the reason for the adjustment. Similarly, the FY25 EPS estimate was increased to $(0.35) from $(0.41), also due to an expanded share count. These revised estimates contrast with the consensus estimates, which remain at $(0.61) and $(0.41) for FY24 and FY25, respectively.
The revenue estimates for 60 Degrees Pharmaceuticals have not been altered and remain at $806,000 for FY24 and $2.1 million for FY25. The analyst's commentary reflects confidence in the company's current financial trajectory and its potential continued growth in the pharmaceutical market, particularly with its ARAKODA malaria treatment.
InvestingPro Insights
InvestingPro data points to a nuanced picture for 60 Degrees Pharmaceuticals Inc (NASDAQ:SXTP). The company is currently trading at a high revenue valuation multiple, which could suggest optimism about future growth despite recent challenges. The latest data shows a significant quarterly revenue growth of 580.65% in Q1 2023, indicating a strong start to the year. However, with a negative gross profit margin of -206.35% over the last twelve months as of Q1 2023, it's clear that profitability remains a concern.
From the perspective of market performance, 60 Degrees Pharmaceuticals has seen a strong return over the last week, with a price total return of 26.82%. This short-term gain contrasts with a longer-term view, as the stock has experienced a substantial decline of -94.04% over the past year. With the next earnings date approaching on May 20, 2024, investors will be keenly watching for signs of sustainable financial health.
Among the InvestingPro Tips, two stand out for their relevance: Analysts anticipate sales growth in the current year, aligning with the reported quarterly revenue surge, and the company holds more cash than debt on its balance sheet, which could offer some stability in managing future growth or navigating financial headwinds. For those seeking deeper insights, InvestingPro offers additional tips on 60 Degrees Pharmaceuticals, which could be accessed with a special offer using the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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