Yahoo Finance When Will Natera, Inc. (NASDAQ:NTRA) Breakeven?
Natera, Inc.’s (NASDAQ:NTRA): Natera, Inc., a diagnostics company, provides preconception and prenatal genetic testing services. The company’s loss has recently broadened since it announced a -US$136.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$142.2m, moving it further away from breakeven. Many investors are wondering the rate at which NTRA will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for NTRA.
View our latest analysis for Natera
NTRA is bordering on breakeven, according to the 6 Biotechs analysts. They expect the company to post a final loss in 2020, before turning a profit of US$19m in 2021. So, NTRA is predicted to breakeven approximately 2 years from today. How fast will NTRA 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 48% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, NTRA may become profitable much later than analysts predict.
Underlying developments driving NTRA’s growth isn’t the focus of this broad overview, though, bear in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with NTRA is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in NTRA’s case, it has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of NTRA which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at NTRA, take a look at NTRA’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further research:
Valuation: What is NTRA 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 NTRA 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 Natera’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.
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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. Thank you for reading.
