When Will Fulgent Genetics, Inc. (NASDAQ:FLGT) Breakeven?

Fulgent Genetics, Inc.'s (NASDAQ:FLGT): Fulgent Genetics, Inc., together with its subsidiaries, provides genetic testing services to physicians with clinically actionable diagnostic information. The US$206m market-cap company announced a latest loss of -US$411.0k on 31 December 2019 for its most recent financial year result. As path to profitability is the topic on FLGT’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for FLGT’s growth and when analysts expect the company to become profitable.

See our latest analysis for Fulgent Genetics

According to the 2 industry analysts covering FLGT, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$3.4m in 2021. FLGT is therefore projected to breakeven around a couple of months from now! In order to meet this breakeven date, I calculated the rate at which FLGT must grow year-on-year. It turns out an average annual growth rate of 147% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, FLGT may become profitable much later than analysts predict.

Underlying developments driving FLGT’s growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that FLGT has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. This means that FLGT 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:

This article is not intended to be a comprehensive analysis on FLGT, so if you are interested in understanding the company at a deeper level, take a look at FLGT’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:

1. Valuation: What is FLGT 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 FLGT 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 Fulgent Genetics’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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