VolitionRx Limited’s (AMEX:VNRX): VolitionRx Limited, a life sciences company, focuses on developing blood-based tests to diagnose a range of cancers. The US$84.33M market-cap posted a loss in its most recent financial year of -US$11.91M and a latest trailing-twelve-month loss of -US$13.69M leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which VNRX will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for VNRX, its year of breakeven and its implied growth rate.
According to the industry analysts covering VNRX, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$31.08M in 2020. So, VNRX is predicted to breakeven approximately 2 years from now. What rate will VNRX have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 59.42%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for VNRX given that this is a high-level summary, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. VNRX has managed its capital judiciously, with debt making up 18.61% of equity. This means that VNRX has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of VNRX to cover in one brief article, but the key fundamentals for the company can all be found in one place – VNRX’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should look at:
- Historical Track Record: What has VNRX’s 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 VolitionRx’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.