Yahoo Finance Harvard Bioscience, Inc. (NASDAQ:HBIO) About To Shift From Loss To Profit
We feel now is a pretty good time to analyse Harvard Bioscience, Inc.'s (NASDAQ:HBIO) business as it appears the company may be on the cusp of a considerable accomplishment. Harvard Bioscience, Inc. develops, manufactures, and sells technologies, products, and services that enables fundamental research, discovery, and pre-clinical testing for drug development. With the latest financial year loss of US$7.8m and a trailing-twelve-month loss of US$2.8m, the US$325m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Harvard Bioscience's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Harvard Bioscience
Consensus from 3 of the American Life Sciences analysts is that Harvard Bioscience is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$833k in 2021. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 49% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Harvard Bioscience given that this is a high-level summary, though, keep in mind that generally a life science company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Harvard Bioscience currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Harvard Bioscience's case is 55%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Harvard Bioscience to cover in one brief article, but the key fundamentals for the company can all be found in one place – Harvard Bioscience's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
Valuation: What is Harvard Bioscience 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 Harvard Bioscience 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 Harvard 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. 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.
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