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 plants in the United States. With the latest financial year loss of -US$26.0m and a trailing-twelve month of -US$26.3m, the US$367m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which CLXT will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for CLXT.
According to the 5 industry analysts covering CLXT, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$97m in 2021. CLXT is therefore projected to breakeven around 3 years from now. What rate will CLXT 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 50%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for CLXT given that this is a high-level summary, however, take into account 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.
Before I wrap up, there’s one aspect worth mentioning. CLXT has managed its capital judiciously, with debt making up 19% of equity. This means that CLXT has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on CLXT, so if you are interested in understanding the company at a deeper level, take a look at CLXT’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further research:
- 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.
- 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.
- 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 past 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. For errors that warrant correction please contact the editor at email@example.com.