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CEL-SCI Corporation's (NYSEMKT:CVM) Shift From Loss To Profit

Simply Wall St
·3 min read

We feel now is a pretty good time to analyse CEL-SCI Corporation's (NYSEMKT:CVM) business as it appears the company may be on the cusp of a considerable accomplishment. CEL-SCI Corporation engages in the research and development of immunotherapy for the treatment of cancer and other diseases. The company’s loss has recently broadened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$30m, moving it further away from breakeven. Many investors are wondering about the rate at which CEL-SCI 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.

See our latest analysis for CEL-SCI

According to some industry analysts covering CEL-SCI, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$183m in 2022. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 146%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

Given this is a high-level overview, we won’t go into details of CEL-SCI'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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. CEL-SCI 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 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 too many aspects of CEL-SCI to cover in one brief article, but the key fundamentals for the company can all be found in one place – CEL-SCI's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

  1. Historical Track Record: What has CEL-SCI'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 CEL-SCI's 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@simplywallst.com.