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Loss-Making Biocept, Inc. (NASDAQ:BIOC) Expected To Breakeven In The Medium-Term

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Simply Wall St
·3 min read
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With the business potentially at an important milestone, we thought we'd take a closer look at Biocept, Inc.'s (NASDAQ:BIOC) future prospects. Biocept, Inc., an early stage molecular oncology diagnostics company, develops and commercializes proprietary circulating tumor cell and circulating tumor DNA assays utilizing a standard blood sample. The US$87m market-cap company posted a loss in its most recent financial year of US$25m and a latest trailing-twelve-month loss of US$25m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Biocept's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Biocept

Expectations from some of the American Biotechs analysts is that Biocept is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$12m in 2023. The company is therefore projected to breakeven around 2 years 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 66%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Biocept's upcoming projects, though, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 1.0% of equity. This means that it 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 key fundamentals of Biocept which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Biocept, take a look at Biocept's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

  1. Historical Track Record: What has Biocept'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Biocept's board and the CEO’s background.

  3. 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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.