Lysogene S.A. (EPA:LYS): When Will It Breakeven?

Lysogene S.A.'s (EPA:LYS): Lysogene S.A. engages in the research and clinical development of gene therapy for neurodegenerative disorders. The €64m market-cap company announced a latest loss of -€4.3m on 31 December 2019 for its most recent financial year result. Many investors are wondering the rate at which LYS 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 LYS.

Check out our latest analysis for Lysogene

According to the industry analysts covering LYS, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €69m in 2022. LYS is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, I calculated the rate at which LYS must grow year-on-year. It turns out an average annual growth rate of 50% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, LYS may become profitable much later than analysts predict.

I’m not going to go through company-specific developments for LYS given that this is a high-level summary, however, keep in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing I’d like to point out is that LYS has managed its capital judiciously, with debt making up 13% of equity. This means that LYS has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of LYS to cover in one brief article, but the key fundamentals for the company can all be found in one place – LYS’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:

1. Valuation: What is LYS 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 LYS is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lysogene’s board and the CEO’s back ground.
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.

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.

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