OncoCyte Corporation (NYSEMKT:OCX) Is Expected To Breakeven
OncoCyte Corporation’s (AMEX:OCX): OncoCyte Corporation focuses on the discovery, development, and commercialization of novel and non-invasive blood and urine (liquid biopsy) diagnostic tests for the early detection of cancer. The US$62.85M market-cap posted a loss in its most recent financial year of -US$11.17M and a latest trailing-twelve-month loss of -US$18.52M leading to an even wider gap between loss and breakeven. The most pressing concern for investors is OCX’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for OCX, its year of breakeven and its implied growth rate.
View our latest analysis for OncoCyte
Expectation from analysts is OCX is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$24.79M in 2021. Therefore, OCX is expected to breakeven roughly 3 years from now. In order to meet this breakeven date, I calculated the rate at which OCX must grow year-on-year. It turns out an average annual growth rate of 37.69% is expected, which is rather optimistic! If this rate turns out to be too aggressive, OCX may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for OCX given that this is a high-level summary, though, bear in mind that typically 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 I wrap up, there’s one aspect worth mentioning. OCX has managed its capital judiciously, with debt making up 32.32% of equity. This means that OCX 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 OCX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at OCX, take a look at OCX’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further research:
Valuation: What is OCX 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 OCX 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 OncoCyte’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.
