AVITA Medical, Inc. (NASDAQ:RCEL): Are Analysts Optimistic?
With the business potentially at an important milestone, we thought we'd take a closer look at AVITA Medical, Inc.'s (NASDAQ:RCEL) future prospects. AVITA Medical, Inc. operates as a regenerative medicine company in the United States, Australia, Japan, and the United Kingdom. The company’s loss has recently broadened since it announced a US$27m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$34m, moving it further away from breakeven. The most pressing concern for investors is AVITA Medical's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for AVITA Medical
AVITA Medical is bordering on breakeven, according to the 9 American Biotechs analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$7.9m in 2026. 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 50% 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.
Given this is a high-level overview, we won’t go into details of AVITA Medical's upcoming projects, however, take into account that by and large biotechs, 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.
One thing we’d like to point out is that AVITA Medical has no debt on its balance sheet, which is rare for a loss-making biotech, 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:
There are key fundamentals of AVITA Medical 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 AVITA Medical, take a look at AVITA Medical's company page on Simply Wall St. We've also put together a list of key aspects you should look at:
Valuation: What is AVITA Medical 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 AVITA Medical 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 AVITA Medical’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.
