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When Will BioInvent International AB (publ) (STO:BINV) Become Profitable?

Simply Wall St

BioInvent International AB (publ)'s (STO:BINV): BioInvent International AB (publ) focuses on the research and development of immunomodulating antibodies for the treatment of cancer in Sweden, Europe, and internationally. With the latest financial year loss of -kr123.2m and a trailing-twelve month of -kr115.6m, the kr623m market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which BINV will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for BINV’s growth and when analysts expect the company to become profitable.

View our latest analysis for BioInvent International

BINV is bordering on breakeven, according to Biotechs analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of kr129m in 2020. Therefore, BINV is expected to breakeven roughly a couple of months from now! How fast will BINV have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 108% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, BINV may become profitable much later than analysts predict.

OM:BINV Past and Future Earnings, September 19th 2019

I’m not going to go through company-specific developments for BINV given that this is a high-level summary, but, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that BINV has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high debt relative to its equity. This means that BINV 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 BINV which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at BINV, take a look at BINV’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:

  1. Valuation: What is BINV 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 BINV is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on BioInvent International’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.