Yield10 Bioscience Inc’s (NASDAQ:YTEN): Yield10 Bioscience, Inc., an agricultural bioscience company, engages in developing disruptive technologies for enhancing crop yield in the United States and Canada. The US$12.9m market-cap company’s loss lessens since it announced a -US$10.8m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$10.7m, as it approaches breakeven. The most pressing concern for investors is YTEN’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for YTEN, its year of breakeven and its implied growth rate.
YTEN is bordering on breakeven, according to Biotechs analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$20.0m in 2021. Therefore, YTEN is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which YTEN must grow year-on-year. It turns out an average annual growth rate of 60.6% is expected, which is rather optimistic! 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 YTEN given that this is a high-level summary, however, keep in mind that typically a biotech has lumpy cash flows which are contingent on the product type 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.
One thing I’d like to point out is that YTEN has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high debt relative to its equity. YTEN currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on YTEN, so if you are interested in understanding the company at a deeper level, take a look at YTEN’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further research:
- Historical Track Record: What has YTEN’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 Yield10 Bioscience’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 past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.