Orgenesis Inc. (NASDAQ:ORGS) On The Verge Of Breaking Even
Orgenesis Inc. (NASDAQ:ORGS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Orgenesis Inc., a biotech company, focusing on cell and gene therapies worldwide. The US$38m market-cap company posted a loss in its most recent financial year of US$15m and a latest trailing-twelve-month loss of US$15m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Orgenesis' 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.
View our latest analysis for Orgenesis
Expectations from some of the American Biotechs analysts is that Orgenesis is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$5.5m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 142% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Orgenesis given that this is a high-level summary, however, keep 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. The company has managed its capital prudently, with debt making up 33% 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:
This article is not intended to be a comprehensive analysis on Orgenesis, so if you are interested in understanding the company at a deeper level, take a look at Orgenesis' company page on Simply Wall St. We've also compiled a list of important factors you should look at:
Historical Track Record: What has Orgenesis' 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 Orgenesis' 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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