Telesis Bio, Inc.'s (NASDAQ:TBIO) Shift From Loss To Profit
Telesis Bio, Inc. (NASDAQ:TBIO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Telesis Bio Inc., a synthetic biology company, manufactures and sells synthetic biology instruments, reagents, and associated products and related services, primarily to pharmaceutical and academic laboratories worldwide. The US$72m market-cap company announced a latest loss of US$48m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Telesis Bio's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Telesis Bio
According to the 3 industry analysts covering Telesis Bio, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$100k in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 58% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Telesis Bio's upcoming projects, however, keep in mind that typically a life science company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one issue worth mentioning. Telesis Bio currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Telesis Bio's case is 42%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Telesis Bio, so if you are interested in understanding the company at a deeper level, take a look at Telesis Bio's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
Valuation: What is Telesis Bio 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 Telesis Bio 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 Telesis Bio’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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
