Kancera AB (publ) (STO:KAN): Are Analysts Optimistic?

We feel now is a pretty good time to analyse Kancera AB (publ)'s (STO:KAN) business as it appears the company may be on the cusp of a considerable accomplishment. Kancera AB (publ) develops drugs for inflammatory diseases and cancer in Sweden and internationally. The kr209m market-cap company announced a latest loss of kr65m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Kancera's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Kancera

Kancera is bordering on breakeven, according to some Swedish Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr54m in 2025. Therefore, the company is expected to breakeven just over a year from now. 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 89% 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.

Given this is a high-level overview, we won’t go into details of Kancera's upcoming projects, though, keep 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Kancera 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. 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 key fundamentals of Kancera 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 Kancera, take a look at Kancera's company page on Simply Wall St. We've also put together a list of key factors you should further research:

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