CureVac N.V.'s (NASDAQ:CVAC) Has Found A Path To Profitability

CureVac N.V. (NASDAQ:CVAC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CureVac N.V., a clinical-stage biopharmaceutical company, focuses on developing various transformative medicines based on messenger ribonucleic acid (mRNA). On 31 December 2020, the US$21b market-cap company posted a loss of €129m for its most recent financial year. The most pressing concern for investors is CureVac'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.

See our latest analysis for CureVac

CureVac is bordering on breakeven, according to the 5 American Biotechs analysts. They expect the company to post a final loss in 2020, before turning a profit of €1.0b in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 20% year-on-year, on average, 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 CureVac's upcoming projects, but, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 3.5% 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:

This article is not intended to be a comprehensive analysis on CureVac, so if you are interested in understanding the company at a deeper level, take a look at CureVac's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. Valuation: What is CureVac 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 CureVac is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CureVac’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.

If you decide to trade CureVac, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.