Yahoo Finance Precigen, Inc. (NASDAQ:PGEN): When Will It Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Precigen, Inc.'s (NASDAQ:PGEN) future prospects. Precigen, Inc. operates as a discovery and clinical stage biopharmaceutical company that develops gene and cell therapies using precision technology to target diseases in therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. The US$353m market-cap company posted a loss in its most recent financial year of US$80m and a latest trailing-twelve-month loss of US$85m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Precigen will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Precigen
Consensus from 4 of the American Biotechs analysts is that Precigen is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$55m in 2026. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 48% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Precigen's growth isn’t the focus of this broad overview, but, bear 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 we’d like to point out is that Precigen 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. 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 Precigen, so if you are interested in understanding the company at a deeper level, take a look at Precigen's company page on Simply Wall St. We've also put together a list of key factors you should further examine:
Valuation: What is Precigen 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 Precigen 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 Precigen’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
