Is Cue Biopharma (NASDAQ:CUE) Using Debt In A Risky Way?

Warren Buffett famously said, '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. Importantly, Cue Biopharma, Inc. (NASDAQ:CUE) does carry debt. But the real question is whether this debt is making the company risky.

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Why Does Debt Bring Risk?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. 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. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Cue Biopharma Carry?

The image below, which you can click on for greater detail, shows that Cue Biopharma had debt of US$2.42m at the end of June 2025, a reduction from US$6.25m over a year. However, its balance sheet shows it holds US$28.0m in cash, so it actually has US$25.5m net cash.

A Look At Cue Biopharma's Liabilities

According to the last reported balance sheet, Cue Biopharma had liabilities of US$19.3m due within 12 months, and liabilities of US$3.29m due beyond 12 months. Offsetting this, it had US$28.0m in cash and US$532.0k in receivables that were due within 12 months. So it actually has US$5.95m more liquid assets than total liabilities.

This surplus suggests that Cue Biopharma has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, Cue Biopharma boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Cue Biopharma'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.

View our latest analysis for Cue Biopharma

In the last year Cue Biopharma's revenue was pretty flat, and it made a negative EBIT. While that hardly impresses, its not too bad either.

So How Risky Is Cue Biopharma?

Statistically speaking companies that lose money are riskier than those that make money. And in the last year Cue Biopharma had an earnings before interest and tax (EBIT) loss, truth be told. Indeed, in that time it burnt through US$28m of cash and made a loss of US$39m. Given it only has net cash of US$25.5m, the company may need to raise more capital if it doesn't reach break-even soon. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. We've identified 5 warning signs with Cue Biopharma (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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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.