Harvard Bioscience, Inc. (NASDAQ:HBIO): When Will It Breakeven?
Harvard Bioscience, Inc. (NASDAQ:HBIO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Harvard Bioscience, Inc. develops, manufactures, and sells technologies, products, and services that enables fundamental research, discovery, and pre-clinical testing for drug development in the United States and internationally. With the latest financial year loss of US$288k and a trailing-twelve-month loss of US$6.9m, the US$109m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Harvard Bioscience will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Harvard Bioscience
Consensus from 2 of the American Life Sciences analysts is that Harvard Bioscience is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$6.3m in 2024. The company is therefore projected to breakeven just over a year from now. 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 123%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Harvard Bioscience's growth isn’t the focus of this broad overview, though, take into account that generally life science companies, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Harvard Bioscience currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Harvard Bioscience's case is 68%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Harvard Bioscience, so if you are interested in understanding the company at a deeper level, take a look at Harvard Bioscience's company page on Simply Wall St. We've also put together a list of important aspects you should further research:
Valuation: What is Harvard Bioscience 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 Harvard Bioscience 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 Harvard Bioscience’s board and the CEO’s background.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here