S.C. Santierul Naval 2 Mai (BVB:STNM) Is In A Good Position To Deliver On Growth Plans

Just because a business does not make any money, does not mean that the stock will go down. For example, S.C. Santierul Naval 2 Mai (BVB:STNM) shareholders have done very well over the last year, with the share price soaring by 345%. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.

So notwithstanding the buoyant share price, we think it's well worth asking whether S.C. Santierul Naval 2 Mai's cash burn is too risky. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. Let's start with an examination of the business' cash, relative to its cash burn.

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When Might S.C. Santierul Naval 2 Mai Run Out Of Money?

A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. When S.C. Santierul Naval 2 Mai last reported its June 2025 balance sheet in September 2025, it had zero debt and cash worth RON75m. Looking at the last year, the company burnt through RON17m. Therefore, from June 2025 it had 4.5 years of cash runway. There's no doubt that this is a reassuringly long runway. You can see how its cash balance has changed over time in the image below.

Check out our latest analysis for S.C. Santierul Naval 2 Mai

How Is S.C. Santierul Naval 2 Mai's Cash Burn Changing Over Time?

Whilst it's great to see that S.C. Santierul Naval 2 Mai has already begun generating revenue from operations, last year it only produced RON3.6m, so we don't think it is generating significant revenue, at this point. As a result, we think it's a bit early to focus on the revenue growth, so we'll limit ourselves to looking at how the cash burn is changing over time. During the last twelve months, its cash burn actually ramped up 73%. Oftentimes, increased cash burn simply means a company is accelerating its business development, but one should always be mindful that this causes the cash runway to shrink. Admittedly, we're a bit cautious of S.C. Santierul Naval 2 Mai due to its lack of significant operating revenues. We prefer most of the stocks on this list of stocks that analysts expect to grow.

How Hard Would It Be For S.C. Santierul Naval 2 Mai To Raise More Cash For Growth?

While S.C. Santierul Naval 2 Mai does have a solid cash runway, its cash burn trajectory may have some shareholders thinking ahead to when the company may need to raise more cash. Companies can raise capital through either debt or equity. Many companies end up issuing new shares to fund future growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.

S.C. Santierul Naval 2 Mai's cash burn of RON17m is about 12% of its RON140m market capitalisation. As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution.

How Risky Is S.C. Santierul Naval 2 Mai's Cash Burn Situation?

It may already be apparent to you that we're relatively comfortable with the way S.C. Santierul Naval 2 Mai is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. While its increasing cash burn wasn't great, the other factors mentioned in this article more than make up for weakness on that measure. Based on the factors mentioned in this article, we think its cash burn situation warrants some attention from shareholders, but we don't think they should be worried. On another note, S.C. Santierul Naval 2 Mai has 4 warning signs (and 3 which are a bit unpleasant) we think you should know about.

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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.