ReNeuron Group plc (LON:RENE) Is Expected To Breakeven In The Near Future

ReNeuron Group plc (LON:RENE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ReNeuron Group plc researches, develops, and commercializes cell-based therapies in the United Kingdom. The UK£3.3m market-cap company announced a latest loss of UK£5.4m on 31 March 2023 for its most recent financial year result. Many investors are wondering about the rate at which ReNeuron Group will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for ReNeuron Group

Expectations from some of the British Biotechs analysts is that ReNeuron Group is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of UK£3.3m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 88% year-on-year, on average, which signals high confidence from analysts. 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 ReNeuron Group given that this is a high-level summary, however, bear in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that ReNeuron Group has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Historical Track Record: What has ReNeuron Group's 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 ReNeuron Group's 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.