Cantargia AB (publ) (STO:CANTA) Is Expected To Breakeven In The Near Future

We feel now is a pretty good time to analyse Cantargia AB (publ)'s (STO:CANTA) business as it appears the company may be on the cusp of a considerable accomplishment. Cantargia AB (publ), a biotechnology company, engages in the research and development of antibody-based treatments for life threatening diseases. On 31 December 2023, the kr530m market-cap company posted a loss of kr280m for its most recent financial year. As path to profitability is the topic on Cantargia's investors mind, we've decided to gauge market sentiment. 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 Cantargia

Consensus from 2 of the Swedish Biotechs analysts is that Cantargia is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of kr46m in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Cantargia's growth isn’t the focus of this broad overview, though, bear in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. Cantargia currently 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. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Cantargia which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Cantargia, take a look at Cantargia's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Historical Track Record: What has Cantargia'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 Cantargia'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.