Kindred Biosciences Inc's (NASDAQ:KIN) Shift From Loss To Profit

Kindred Biosciences Inc's (NASDAQ:KIN): Kindred Biosciences, Inc., a biopharmaceutical company, focuses on the development of therapies for pets. The US$282.03m market-cap posted a loss in its most recent financial year of -US$30.88m and a latest trailing-twelve-month loss of -US$34.36m leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which KIN will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for KIN, its year of breakeven and its implied growth rate.

Expectation from Biotechs analysts is KIN is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$1.93m in 2021. KIN is therefore projected to breakeven around a few months from now. How fast will KIN have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 47.29% 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, I won’t go into details of KIN’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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing I’d like to point out is that KIN has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. KIN currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on KIN, so if you are interested in understanding the company at a deeper level, take a look at KIN’s company page on Simply Wall St. I’ve also put together a list of essential factors you should look at:

1. Historical Track Record: What has KIN'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 Kindred Biosciences’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.