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When Will Calyxt, Inc. (NASDAQ:CLXT) Turn A Profit?

Simply Wall St

Calyxt, Inc.'s (NASDAQ:CLXT): Calyxt, Inc., a consumer-centric food- and agriculture-focused company, develops healthier specialty food ingredients and food crops using gene-editing technology for agriculture in the United States. With the latest financial year loss of -US$27.9m and a trailing-twelve month of -US$35.9m, the US$133m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on CLXT’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CLXT.

View our latest analysis for Calyxt

CLXT is bordering on breakeven, according to the 6 Biotechs analysts. They expect the company to post a final loss in 2021, before turning a profit of US$7.8m in 2022. So, CLXT is predicted to breakeven approximately 3 years from now. How fast will CLXT 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 48% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, CLXT may become profitable much later than analysts predict.

NasdaqGM:CLXT Past and Future Earnings, November 10th 2019

I’m not going to go through company-specific developments for CLXT given that this is a high-level summary, but, take into account that typically 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 I wrap up, there’s one aspect worth mentioning. CLXT currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that CLXT 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 too many aspects of CLXT to cover in one brief article, but the key fundamentals for the company can all be found in one place – CLXT’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:

  1. Historical Track Record: What has CLXT's 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 Calyxt’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.