When Will Evaxion Biotech A/S (NASDAQ:EVAX) Become Profitable?

We feel now is a pretty good time to analyse Evaxion Biotech A/S' (NASDAQ:EVAX) business as it appears the company may be on the cusp of a considerable accomplishment. Evaxion Biotech A/S, a clinical-stage biotech company, engages in developing artificial intelligence-powered immunotherapies. The US$16m market-cap company posted a loss in its most recent financial year of US$22m and a latest trailing-twelve-month loss of US$15m shrinking the gap between loss and breakeven. The most pressing concern for investors is Evaxion Biotech'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.

View our latest analysis for Evaxion Biotech

According to the 4 industry analysts covering Evaxion Biotech, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$31m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which is extremely buoyant. 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 Evaxion Biotech's upcoming projects, though, keep in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Evaxion Biotech has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Evaxion Biotech which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Evaxion Biotech, take a look at Evaxion Biotech's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Historical Track Record: What has Evaxion Biotech's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Evaxion Biotech'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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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.

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