When Will ThermoGenesis Holdings, Inc. (NASDAQ:THMO) Become Profitable?

By
Simply Wall St
Published
April 06, 2021
NasdaqCM:THMO

ThermoGenesis Holdings, Inc. (NASDAQ:THMO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ThermoGenesis Holdings, Inc. develops, commercializes, and markets a range of automated technologies for chimeric antigen receptor (CAR-T) and other cell-based therapies. On 31 December 2020, the US$35m market-cap company posted a loss of US$16m for its most recent financial year. Many investors are wondering about the rate at which ThermoGenesis Holdings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for ThermoGenesis Holdings

Expectations from some of the American Medical Equipment analysts is that ThermoGenesis Holdings is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$3.6m in 2022. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqCM:THMO Earnings Per Share Growth April 6th 2021

We're not going to go through company-specific developments for ThermoGenesis Holdings given that this is a high-level summary, though, keep in mind that by and large 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 issue worth mentioning. ThermoGenesis Holdings currently has a debt-to-equity ratio of 121%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on ThermoGenesis Holdings, so if you are interested in understanding the company at a deeper level, take a look at ThermoGenesis Holdings' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

  1. Historical Track Record: What has ThermoGenesis Holdings' 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 ThermoGenesis Holdings' 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. 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.
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