We feel now is a pretty good time to analyse ChromaDex Corporation's (NASDAQ:CDXC) business as it appears the company may be on the cusp of a considerable accomplishment. ChromaDex Corporation operates as a bioscience company focusing on healthy aging. On 31 December 2020, the US$792m market-cap company posted a loss of US$20m for its most recent financial year. The most pressing concern for investors is ChromaDex's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 6 industry analysts covering ChromaDex, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$14m in 2023. The company is therefore projected to breakeven around 2 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 67%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of ChromaDex's upcoming projects, however, take into account that generally life science companies, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. ChromaDex currently has no debt on its balance sheet, which is quite unusual for a cash-burning life science company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of ChromaDex to cover in one brief article, but the key fundamentals for the company can all be found in one place – ChromaDex's company page on Simply Wall St. We've also compiled a list of key factors you should look at:
- Valuation: What is ChromaDex 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 ChromaDex is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ChromaDex’s board and the CEO’s background.
- 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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