Accelerating EU Gene Editing Acceptance Will Open Global Markets

Key Takeaways

• Accelerating regulatory acceptance and efficient technology platform will expand market opportunities, boost revenue growth, and improve margins through rapid speed-to-market.
  
• Diversified royalty partnerships and disciplined cost management are expected to enhance earnings stability, cash flow, and recurring revenue streams.
  
• Overdependence on a few customers and products, coupled with tight cash flow, regulatory uncertainty, and intensified competition, threatens revenue stability, growth, and future earnings.

Catalysts

An agricultural biotechnology company, develops and licenses gene edited plant traits using gene editing technologies to enhance farming productivity or produce renewable low carbon plant products.

• Cibus is poised to benefit from accelerating regulatory acceptance of gene-editing technologies globally-especially anticipated EU legislation within 6 months-removing major commercialization barriers and significantly expanding their addressable markets, which should drive robust top-line revenue growth over the medium and long term.
  
• The company's technology (RTDS platform) enables rapid and efficient trait development and integration into customer germplasm (12-15 months), offering a major breakthrough in speed-to-market that can lead to faster royalty revenue ramp and improved net margins through operational efficiency.
  
• Strategic focus on launching rice herbicide tolerance traits with a clear commercial path to over $200 million in potential annual royalty revenue beginning in 2027-alongside near-term ramp in biofragrance revenues-positions Cibus for significant and recurring revenue growth inflection starting in 2026.
  
• Partnerships and royalty agreements with leading seed companies in multiple crops (rice, canola, soybean, alfalfa) are generating a pipeline of diversification, enabling recurring royalty streams and increasing earnings visibility, supporting improvements in earnings stability and quality.
  
• Disciplined capital allocation, cost reductions, and shift to partner-funded trait development are substantially lowering operating expenses and expected annual cash burn, setting the stage for margin improvement and better cash flow as revenue transitions from nominal to commercial scale.

Cibus Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Cibus's revenue will grow by 185.5% annually over the next 3 years.
• Analysts are not forecasting that Cibus will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Cibus's profit margin will increase from -5681.6% to the average US Biotechs industry of 16.1% in 3 years.
• If Cibus's profit margin were to converge on the industry average, you could expect earnings to reach $18.1 million (and earnings per share of $0.27) by about September 2028, up from $-275.3 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 74.1x on those 2028 earnings, up from -0.2x today. This future PE is greater than the current PE for the US Biotechs industry at 15.5x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.22%, as per the Simply Wall St company report.

Cibus Future Earnings Per Share Growth

Risks

• Heavy reliance on a single major customer for the 2026 biofragrance commercial ramp creates significant revenue concentration risk; a delay, reduction, or loss of this relationship could materially impact short-term and medium-term revenue growth and cash flow.
  
• The company's cash runway is expected to last only into the second quarter of 2026, placing pressure to achieve initial revenue milestones quickly; any delay in commercialization, regulatory approval, or partner funding could force Cibus to raise capital under unfavorable terms, directly impacting shareholder dilution and net margins.
  
• Cibus's focus on a narrow set of crops and traits (notably rice herbicide tolerance traits and biofragrances) heightens vulnerability to unforeseen regulatory, technological, or market disruptions in these specific segments, putting future earnings at risk if these launches are delayed or fail to meet expectations.
  
• The capital-intensive nature of R&D and the company's recent reduction in force may slow innovation, jeopardizing its ability to keep pace with larger, well-capitalized ag-biotech competitors and risking long-term revenue growth and margin expansion as industry competition intensifies.
  
• Ongoing regulatory uncertainty, especially in the EU's trialogue process on gene editing, poses a risk of delayed or restricted market access; setbacks in regulatory harmonization or stricter-than-anticipated labeling/patent rules could postpone global commercialization, directly affecting Cibus's top-line growth trajectory and earnings visibility.

Valuation

• The analysts have a consensus price target of $14.4 for Cibus based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $25.0, and the most bearish reporting a price target of just $1.6.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $112.8 million, earnings will come to $18.1 million, and it would be trading on a PE ratio of 74.1x, assuming you use a discount rate of 12.2%.
• Given the current share price of $1.28, the analyst price target of $14.4 is 91.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.