We feel now is a pretty good time to analyse MaxCyte, Inc.'s (LON:MXCT) business as it appears the company may be on the cusp of a considerable accomplishment. MaxCyte, Inc. operates as a cell-based therapies and life sciences company in the United States and internationally. The UK£762m market-cap company announced a latest loss of US$12m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on MaxCyte's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
MaxCyte is bordering on breakeven, according to the 3 British Biotechs analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$5.4m in 2023. 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of MaxCyte's upcoming projects, but, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 15% 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.
There are too many aspects of MaxCyte to cover in one brief article, but the key fundamentals for the company can all be found in one place – MaxCyte's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:
Valuation: What is MaxCyte 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 MaxCyte 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 MaxCyte’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.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.