Sight Sciences (NASDAQ:SGHT) Has Debt But No Earnings; Should You Worry?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Sight Sciences, Inc. (NASDAQ:SGHT) makes use of debt. But the more important question is: how much risk is that debt creating?

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When Is Debt Dangerous?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Sight Sciences Carry?

As you can see below, at the end of September 2025, Sight Sciences had US$40.1m of debt, up from US$34.2m a year ago. Click the image for more detail. However, it does have US$92.4m in cash offsetting this, leading to net cash of US$52.3m.

A Look At Sight Sciences' Liabilities

According to the last reported balance sheet, Sight Sciences had liabilities of US$11.8m due within 12 months, and liabilities of US$40.1m due beyond 12 months. On the other hand, it had cash of US$92.4m and US$9.74m worth of receivables due within a year. So it can boast US$50.2m more liquid assets than total liabilities.

This short term liquidity is a sign that Sight Sciences could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that Sight Sciences has more cash than debt is arguably a good indication that it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Sight Sciences's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Check out our latest analysis for Sight Sciences

In the last year Sight Sciences had a loss before interest and tax, and actually shrunk its revenue by 4.4%, to US$76m. We would much prefer see growth.

So How Risky Is Sight Sciences?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And we do note that Sight Sciences had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of US$32m and booked a US$46m accounting loss. While this does make the company a bit risky, it's important to remember it has net cash of US$52.3m. That means it could keep spending at its current rate for more than two years. Overall, its balance sheet doesn't seem overly risky, at the moment, but we're always cautious until we see the positive free cash flow. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. We've identified 3 warning signs with Sight Sciences , and understanding them should be part of your investment process.

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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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.