Biocept, Inc. (NASDAQ:BIOC): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Biocept, Inc.'s (NASDAQ:BIOC) future prospects. Biocept, Inc., an early stage molecular oncology diagnostics company, develops and commercializes proprietary circulating tumor cell and circulating tumor DNA assays utilizing a standard blood sample. The US$66m market-cap company posted a loss in its most recent financial year of US$25m and a latest trailing-twelve-month loss of US$25m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Biocept's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Biocept

According to the 2 industry analysts covering Biocept, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$12m in 2023. So, the company is predicted to breakeven approximately 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 72%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Biocept's growth isn’t the focus of this broad overview, however, keep in mind that typically 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. The company has managed its capital judiciously, with debt making up 1.0% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Biocept 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 Biocept, take a look at Biocept's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

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