Companies Like GURU Organic Energy (TSE:GURU) Can Afford To Invest In Growth

We can readily understand why investors are attracted to unprofitable companies. For example, GURU Organic Energy (TSE:GURU) shareholders have done very well over the last year, with the share price soaring by 257%. But while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com?

Given its strong share price performance, we think it's worthwhile for GURU Organic Energy shareholders to consider whether its cash burn is concerning. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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Does GURU Organic Energy Have A Long Cash Runway?

A company's cash runway is calculated by dividing its cash hoard by its cash burn. In July 2025, GURU Organic Energy had CA$24m in cash, and was debt-free. In the last year, its cash burn was CA$4.4m. Therefore, from July 2025 it had 5.6 years of cash runway. Importantly, though, analysts think that GURU Organic Energy will reach cashflow breakeven before then. In that case, it may never reach the end of its cash runway. Depicted below, you can see how its cash holdings have changed over time.

Check out our latest analysis for GURU Organic Energy

How Well Is GURU Organic Energy Growing?

It was fairly positive to see that GURU Organic Energy reduced its cash burn by 52% during the last year. And operating revenue was up by 3.3% too. On balance, we'd say the company is improving over time. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

Can GURU Organic Energy Raise More Cash Easily?

There's no doubt GURU Organic Energy seems to be in a fairly good position, when it comes to managing its cash burn, but even if it's only hypothetical, it's always worth asking how easily it could raise more money to fund growth. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.

GURU Organic Energy has a market capitalisation of CA$165m and burnt through CA$4.4m last year, which is 2.6% of the company's market value. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.

How Risky Is GURU Organic Energy's Cash Burn Situation?

It may already be apparent to you that we're relatively comfortable with the way GURU Organic Energy is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. On this analysis its revenue growth was its weakest feature, but we are not concerned about it. There's no doubt that shareholders can take a lot of heart from the fact that analysts are forecasting it will reach breakeven before too long. After considering a range of factors in this article, we're pretty relaxed about its cash burn, since the company seems to be in a good position to continue to fund its growth. Notably, our data indicates that GURU Organic Energy insiders have been trading the shares. You can discover if they are buyers or sellers by clicking on this link.

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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.