When Will CareDx, Inc (NASDAQ:CDNA) Breakeven?
CareDx, Inc's (NASDAQ:CDNA): CareDx, Inc., a transplant diagnostics company, together with its subsidiaries, focuses on the discovery, development, and commercialization of diagnostic solutions for transplant patients worldwide. With the latest financial year loss of -US$46.8m and a trailing-twelve month of -US$20.9m, the US$948m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on CDNA’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for CDNA, its year of breakeven and its implied growth rate.
Check out our latest analysis for CareDx
According to the 5 industry analysts covering CDNA, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$32m in 2021. So, CDNA is predicted to breakeven approximately a few months from now. How fast will CDNA have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 89% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, CDNA may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of CDNA’s upcoming projects, but, keep in mind that by and large 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 I’d like to point out is that CDNA has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. CDNA currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on CDNA, so if you are interested in understanding the company at a deeper level, take a look at CDNA’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further research:
Valuation: What is CDNA 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 CDNA 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 CareDx’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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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