Market Sentiment Around Loss-Making Circio Holding ASA (OB:CRNA)

Circio Holding ASA (OB:CRNA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Circio Holding ASA, a clinical stage cancer immunotherapy and RNA therapeutics company. The kr38m market-cap company announced a latest loss of kr111m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Circio Holding 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.

See our latest analysis for Circio Holding

Circio Holding is bordering on breakeven, according to the 2 Norwegian Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of kr17m in 2025. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 93%, 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 Circio Holding's growth isn’t the focus of this broad overview, though, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Circio Holding is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Circio Holding, so if you are interested in understanding the company at a deeper level, take a look at Circio Holding's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Circio Holding 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 Circio Holding 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 Circio Holding’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.