Breakeven On The Horizon For Rakovina Therapeutics Inc. (CVE:RKV)

Rakovina Therapeutics Inc. (CVE:RKV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Rakovina Therapeutics Inc., a biopharmaceutical research company, engages in the research and development of cancer treatments based on novel series of small-molecule DNA-damage response targets. The CA$14m market-cap company posted a loss in its most recent financial year of CA$2.6m and a latest trailing-twelve-month loss of CA$3.3m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Rakovina Therapeutics' 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.

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According to some industry analysts covering Rakovina Therapeutics, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of CA$38m in 2026. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 24% year-on-year, on average, which is extremely buoyant. 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 Rakovina Therapeutics given that this is a high-level summary, however, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Check out our latest analysis for Rakovina Therapeutics

One thing we would like to bring into light with Rakovina Therapeutics is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Rakovina Therapeutics' case is 45%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Rakovina Therapeutics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rakovina Therapeutics' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Historical Track Record: What has Rakovina Therapeutics' 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 Rakovina Therapeutics' 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.