When Will Sernova Biotherapeutics Inc (TSE:SVA) Turn A Profit?

Sernova Biotherapeutics Inc (TSE:SVA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Sernova Biotherapeutics Inc operates as a clinical-stage biotechnology company in Canada. The CA$59m market-cap company’s loss lessened since it announced a CA$32m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$28m, as it approaches breakeven. Many investors are wondering about the rate at which Sernova Biotherapeutics will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Sernova Biotherapeutics is bordering on breakeven, according to the 4 Canadian Biotechs analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of CA$8.6m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Sernova Biotherapeutics' growth isn’t the focus of this broad overview, however, take into account that by and large 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.

Check out our latest analysis for Sernova Biotherapeutics

One thing we would like to bring into light with Sernova Biotherapeutics is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Sernova Biotherapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Sernova Biotherapeutics, take a look at Sernova Biotherapeutics' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Historical Track Record: What has Sernova Biotherapeutics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sernova Biotherapeutics' board and the CEO’s background.
3. 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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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.