We're Hopeful That Hydrogène de France Société anonyme (EPA:HDF) Will Use Its Cash Wisely

Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.

Given this risk, we thought we'd take a look at whether Hydrogène de France Société anonyme (EPA:HDF) shareholders should be worried about its cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

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Does Hydrogène de France Société anonyme Have A Long Cash Runway?

A company's cash runway is calculated by dividing its cash hoard by its cash burn. When Hydrogène de France Société anonyme last reported its June 2025 balance sheet in September 2025, it had zero debt and cash worth €29m. In the last year, its cash burn was €17m. That means it had a cash runway of around 21 months as of June 2025. That's not too bad, but it's fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. The image below shows how its cash balance has been changing over the last few years.

See our latest analysis for Hydrogène de France Société anonyme

How Well Is Hydrogène de France Société anonyme Growing?

We reckon the fact that Hydrogène de France Société anonyme managed to shrink its cash burn by 41% over the last year is rather encouraging. But it was the operating revenue growth of 257% that really shone. It seems to be growing nicely. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.

How Easily Can Hydrogène de France Société anonyme Raise Cash?

We are certainly impressed with the progress Hydrogène de France Société anonyme has made over the last year, but it is also worth considering how costly it would be if it wanted to raise more cash to fund faster growth. Companies can raise capital through either debt or equity. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.

Hydrogène de France Société anonyme's cash burn of €17m is about 28% of its €60m market capitalisation. That's not insignificant, and if the company had to sell enough shares to fund another year's growth at the current share price, you'd likely witness fairly costly dilution.

How Risky Is Hydrogène de France Société anonyme's Cash Burn Situation?

Even though its cash burn relative to its market cap makes us a little nervous, we are compelled to mention that we thought Hydrogène de France Société anonyme's revenue growth was relatively promising. Cash burning companies are always on the riskier side of things, but after considering all of the factors discussed in this short piece, we're not too worried about its rate of cash burn. Taking an in-depth view of risks, we've identified 2 warning signs for Hydrogène de France Société anonyme that you should be aware of before investing.

Of course Hydrogène de France Société anonyme may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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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.