Kodiak Sciences Inc. (NASDAQ:KOD) Is Expected To Breakeven In The Near Future
Kodiak Sciences Inc. (NASDAQ:KOD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kodiak Sciences Inc., a clinical stage biopharmaceutical company, researches, develops, and commercializes therapeutics to treat retinal diseases. The US$189m market-cap company’s loss lessened since it announced a US$334m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$309m, as it approaches breakeven. The most pressing concern for investors is Kodiak Sciences' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Kodiak Sciences
According to the 5 industry analysts covering Kodiak Sciences, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$84m in 2025. The company is therefore projected to breakeven around 2 years from today. 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 65%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Kodiak Sciences' upcoming projects, though, bear in mind that by and large biotechs, 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 we wrap up, there’s one aspect worth mentioning. Kodiak Sciences currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Kodiak Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Kodiak Sciences' company page on Simply Wall St. We've also put together a list of key factors you should further examine:
Historical Track Record: What has Kodiak Sciences' 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 Kodiak Sciences' 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.
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