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Applied DNA Sciences, Inc. (NASDAQ:APDN): Is Breakeven Near?

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Simply Wall St
·3 min read
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Applied DNA Sciences, Inc. (NASDAQ:APDN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Applied DNA Sciences, Inc. develops and markets DNA-based technology solutions for use in the nucleic acid-based in vitro diagnostics and preclinical nucleic-acid based drug development and manufacturing markets; and for supply chain security, anti-counterfeiting, and anti-theft technology purposes applications in the United States, Europe, and Asia. With the latest financial year loss of US$13m and a trailing-twelve-month loss of US$15m, the US$66m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Applied DNA Sciences 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.

View our latest analysis for Applied DNA Sciences

According to the 3 industry analysts covering Applied DNA Sciences, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$552k in 2022. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 67% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Applied DNA Sciences' growth isn’t the focus of this broad overview, but, keep in mind that generally life science companies, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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.

Next Steps:

There are key fundamentals of Applied DNA Sciences which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Applied DNA Sciences, take a look at Applied DNA Sciences' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

  1. Historical Track Record: What has Applied DNA Sciences' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Applied DNA Sciences' board and the CEO’s background.

  3. 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.