When Can We Expect A Profit From Kindred Biosciences Inc (NASDAQ:KIN)?

Kindred Biosciences Inc’s (NASDAQ:KIN): Kindred Biosciences, Inc., a development stage biopharmaceutical company, focuses on the development of therapies for pets. The company’s loss has recently broadened since it announced a -US$22.50M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$26.96M, moving it further away from breakeven. The most pressing concern for investors is KIN’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for KIN, its year of breakeven and its implied growth rate.

View our latest analysis for Kindred Biosciences

Expectation from analysts is KIN is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$6.04M in 2020. KIN is therefore projected to breakeven around 2 years from today. How fast will KIN have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 46.61% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, KIN may become profitable much later than analysts predict.

NasdaqCM:KIN Past Future Earnings Feb 27th 18
NasdaqCM:KIN Past Future Earnings Feb 27th 18

Underlying developments driving KIN’s growth isn’t the focus of this broad overview, though, bear in mind 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:

There are key fundamentals of KIN which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at KIN, take a look at KIN’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:

  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.