Invitae Corporation (NYSE:NVTA): When Will It Breakeven?
Invitae Corporation’s (NYSE:NVTA): Invitae Corporation, a genetic information company, processes DNA-containing samples, analyzes information related to patient-specific genetic variation, and generates test reports for clinicians and their patients in the United States, Canada, and internationally. The US$377.01M market-cap company announced a latest loss of -US$123.38M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is NVTA’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for NVTA, its year of breakeven and its implied growth rate.
See our latest analysis for Invitae
NVTA is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$33.90M in 2022. NVTA is therefore projected to breakeven around 4 years from now. In order to meet this breakeven date, I calculated the rate at which NVTA must grow year-on-year. It turns out an average annual growth rate of 43.20% is expected, which is rather optimistic! If this rate turns out to be too aggressive, NVTA may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for NVTA given that this is a high-level summary, but, keep in mind 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. NVTA has managed its capital prudently, with debt making up 36.53% of equity. This means that NVTA 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:
This article is not intended to be a comprehensive analysis on NVTA, so if you are interested in understanding the company at a deeper level, take a look at NVTA’s company page on Simply Wall St. I’ve also compiled a list of key factors you should look at:
Historical Track Record: What has NVTA’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 Invitae’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.
