CureVac N.V.'s (NASDAQ:CVAC) Shift From Loss To Profit

By
Simply Wall St
Published
March 16, 2022
NasdaqGM:CVAC
Source: Shutterstock

We feel now is a pretty good time to analyse CureVac N.V.'s (NASDAQ:CVAC) business as it appears the company may be on the cusp of a considerable accomplishment. CureVac N.V., a clinical-stage biopharmaceutical company, focuses on developing various transformative medicines based on messenger ribonucleic acid (mRNA). The company’s loss has recently broadened since it announced a €129m loss in the full financial year, compared to the latest trailing-twelve-month loss of €468m, moving it further away from breakeven. Many investors are wondering about the rate at which CureVac will turn a profit, with the big question being “when will the company 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 CureVac

According to the 5 industry analysts covering CureVac, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of €615m in 2024. Therefore, the company is expected to breakeven roughly 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 64%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqGM:CVAC Earnings Per Share Growth March 16th 2022

We're not going to go through company-specific developments for CureVac given that this is a high-level summary, though, keep in mind that generally 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 4.0% 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:

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 essential aspects you should look at:

  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.

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