When Will Vericel Corporation (NASDAQ:VCEL) Turn A Profit?
Vericel Corporation’s (NASDAQ:VCEL): Vericel Corporation, a commercial-stage biopharmaceutical company, researches, develops, manufactures, markets, and sells patient-specific expanded cellular therapies to repair and regenerate damaged tissues and organs. With the latest financial year loss of -US$17.29M and a trailing-twelve month of -US$15.17M, the US$502.81M market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which VCEL will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for VCEL’s growth and when analysts expect the company to become profitable.
View our latest analysis for Vericel
According to the industry analysts covering VCEL, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$2.86M in 2020. So, VCEL is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which VCEL must grow year-on-year. It turns out an average annual growth rate of 71.19% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving VCEL’s growth isn’t the focus of this broad overview, however, take into account that typically 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 I would like to bring into light with VCEL is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in VCEL’s case is 82.38%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of VCEL to cover in one brief article, but the key fundamentals for the company can all be found in one place – VCEL’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further examine:
Valuation: What is VCEL 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 VCEL 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 Vericel’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.
