Yahoo Finance Market Sentiment Around Loss-Making genedrive plc (LON:GDR)
genedrive plc (LON:GDR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. genedrive plc, a molecular diagnostics company, engages in developing and commercializing point of need diagnostics platform for infectious diseases, genotyping, pathogen detection, and other indications. On 30 June 2021, the UK£15m market-cap company posted a loss of UK£691k for its most recent financial year. Many investors are wondering about the rate at which genedrive will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for genedrive
Expectations from some of the British Life Sciences analysts is that genedrive is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of UK£2.0m in 2023. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 71%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving genedrive's growth isn’t the focus of this broad overview, though, take into account that typically a life science company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that genedrive has no debt on its balance sheet, which is quite unusual for a cash-burning life science company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on genedrive, so if you are interested in understanding the company at a deeper level, take a look at genedrive's company page on Simply Wall St. We've also compiled a list of important factors you should look at:
Valuation: What is genedrive 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 genedrive is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on genedrive’s board and the CEO’s background.
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.
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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.
