Codexis, Inc. (NASDAQ:CDXS) Is Expected To Breakeven
Codexis, Inc.’s (NASDAQ:CDXS): Codexis, Inc. discovers, develops, and sells protein catalysts. The US$1.1b market-cap company announced a latest loss of -US$10.9m on 31 December 2018 for its most recent financial year result. Many investors are wondering the rate at which CDXS will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for CDXS’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Codexis
CDXS is bordering on breakeven, according to the 5 Life Sciences analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$12m in 2021. So, CDXS is predicted to breakeven approximately 2 years from today. What rate will CDXS 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 55%, which signals high confidence from analysts. If this rate turns out to be too aggressive, CDXS may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of CDXS’s upcoming projects, however, bear in mind that by and large life science companies, depending on the stage of product development, have irregular periods of cash flow. 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. CDXS has managed its capital prudently, with debt making up 0.1% of equity. This means that CDXS 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 CDXS to cover in one brief article, but the key fundamentals for the company can all be found in one place – CDXS’s company page on Simply Wall St. I’ve also put together a list of key factors you should look at:
Valuation: What is CDXS 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 CDXS 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 Codexis’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.
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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.
