ChromaDex Corporation’s (NASDAQ:CDXC) Path To Profitability
ChromaDex Corporation’s (NASDAQ:CDXC): ChromaDex Corporation operates as a nutraceutical company. On 31 December 2017, the US$198.07M market-cap posted a loss of -US$16.53M for its most recent financial year. Many investors are wondering the rate at which CDXC will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for CDXC’s growth and when analysts expect the company to become profitable.
See our latest analysis for ChromaDex
CDXC is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2018, before turning a profit of US$2.04M in 2019. So, CDXC is predicted to breakeven approximately a couple of months from now! What rate will CDXC have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 63.11%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving CDXC’s growth isn’t the focus of this broad overview, however, keep in mind that by and large a life science company has lumpy cash flows which are contingent on the product 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.
Before I wrap up, there’s one aspect worth mentioning. CDXC has managed its capital prudently, with debt making up 0.94% of equity. This means that CDXC 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 too many aspects of CDXC to cover in one brief article, but the key fundamentals for the company can all be found in one place – CDXC’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further research:
Historical Track Record: What has CDXC’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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ChromaDex’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
