When Will Mesoblast Limited (ASX:MSB) Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Mesoblast Limited's (ASX:MSB) future prospects. Mesoblast Limited engages in the development of regenerative medicine products in Australia, the United States, Singapore, and Switzerland. On 30 June 2023, the AU$293m market-cap company posted a loss of US$82m for its most recent financial year. Many investors are wondering about the rate at which Mesoblast will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Mesoblast
Mesoblast is bordering on breakeven, according to the 7 Australian Biotechs analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$41m in 2026. So, the company is predicted to breakeven approximately 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 0.7% year-on-year, on average, which is relatively conservative. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.
Given this is a high-level overview, we won’t go into details of Mesoblast's upcoming projects, though, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 22% 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 too many aspects of Mesoblast to cover in one brief article, but the key fundamentals for the company can all be found in one place – Mesoblast's company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Mesoblast 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 Mesoblast 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 Mesoblast’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.
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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.
