Cryoport (NASDAQ:CYRX) Has Debt But No Earnings; Should You Worry?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We note that Cryoport, Inc. (NASDAQ:CYRX) does have debt on its balance sheet. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

How Much Debt Does Cryoport Carry?

The image below, which you can click on for greater detail, shows that Cryoport had debt of US$199.5m at the end of December 2024, a reduction from US$380.0m over a year. But on the other hand it also has US$261.7m in cash, leading to a US$62.3m net cash position.

How Healthy Is Cryoport's Balance Sheet?

We can see from the most recent balance sheet that Cryoport had liabilities of US$64.6m falling due within a year, and liabilities of US$237.0m due beyond that. On the other hand, it had cash of US$261.7m and US$45.8m worth of receivables due within a year. So its total liabilities are just about perfectly matched by its shorter-term, liquid assets.

This short term liquidity is a sign that Cryoport could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Cryoport 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 ultimately the future profitability of the business will decide if Cryoport can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts .

Check out our latest analysis for Cryoport

Over 12 months, Cryoport made a loss at the EBIT level, and saw its revenue drop to US$228m, which is a fall of 2.1%. We would much prefer see growth.

So How Risky Is Cryoport?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And we do note that Cryoport had an earnings before interest and tax (EBIT) loss, over the last year. Indeed, in that time it burnt through US$38m of cash and made a loss of US$123m. But the saving grace is the US$62.3m on the balance sheet. That kitty means the company can keep spending for growth for at least two years, at current rates. 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. For example, we've discovered 3 warning signs for Cryoport (1 can't be ignored!) that you should be aware of before investing here.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.