CareDx, Inc (NASDAQ:CDNA): Are Analysts Optimistic?

We feel now is a pretty good time to analyse CareDx, Inc's (NASDAQ:CDNA) business as it appears the company may be on the cusp of a considerable accomplishment. CareDx, Inc. engages in the discovery, development, and commercialization of diagnostic solutions for transplant patients and caregivers in the United States and internationally. The US$1.2b market-cap company posted a loss in its most recent financial year of US$190m and a latest trailing-twelve-month loss of US$144m shrinking the gap between loss and breakeven. The most pressing concern for investors is CareDx's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for CareDx

CareDx is bordering on breakeven, according to the 7 American Biotechs analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$37m in 2027. So, the company is predicted to breakeven approximately 2 years from today. 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 94% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of CareDx's upcoming projects, though, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that CareDx 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. This means that the company 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 CareDx, so if you are interested in understanding the company at a deeper level, take a look at CareDx's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

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