Yield10 Bioscience, Inc.'s (NASDAQ:YTEN) Profit Outlook
With the business potentially at an important milestone, we thought we'd take a closer look at Yield10 Bioscience, Inc.'s (NASDAQ:YTEN) future prospects. Yield10 Bioscience, Inc., an agricultural bioscience company, engages in developing disruptive technologies for step-changing improvements in crop yield in the United States and Canada. With the latest financial year loss of US$13.0m and a trailing-twelve-month loss of US$14.2m, the US$11m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Yield10 Bioscience's 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.
See our latest analysis for Yield10 Bioscience
According to the 3 industry analysts covering Yield10 Bioscience, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$13m in 2022. The company is therefore projected to breakeven around 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 73% 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 Yield10 Bioscience's growth isn’t the focus of this broad overview, however, bear in mind that generally 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.
One thing we’d like to point out is that Yield10 Bioscience has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Yield10 Bioscience, so if you are interested in understanding the company at a deeper level, take a look at Yield10 Bioscience's company page on Simply Wall St. We've also put together a list of key factors you should further examine:
Historical Track Record: What has Yield10 Bioscience'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 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.
This article by Simply Wall St is general in nature. 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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