- United States
- /
- Biotech
- /
- NasdaqGM:NRIX
Companies Like Nurix Therapeutics (NASDAQ:NRIX) Are In A Position To Invest In Growth
We can readily understand why investors are attracted to unprofitable companies. By way of example, Nurix Therapeutics (NASDAQ:NRIX) has seen its share price rise 149% over the last year, delighting many shareholders. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.
Given its strong share price performance, we think it's worthwhile for Nurix Therapeutics shareholders to consider whether its cash burn is concerning. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.
Check out our latest analysis for Nurix Therapeutics
Does Nurix Therapeutics Have A Long Cash Runway?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. In November 2024, Nurix Therapeutics had US$610m in cash, and was debt-free. In the last year, its cash burn was US$182m. That means it had a cash runway of about 3.4 years as of November 2024. There's no doubt that this is a reassuringly long runway. You can see how its cash balance has changed over time in the image below.
How Well Is Nurix Therapeutics Growing?
Notably, Nurix Therapeutics actually ramped up its cash burn very hard and fast in the last year, by 103%, signifying heavy investment in the business. As if that's not bad enough, the operating revenue also dropped by 29%, making us very wary indeed. Considering these two factors together makes us nervous about the direction the company seems to be heading. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.
How Hard Would It Be For Nurix Therapeutics To Raise More Cash For Growth?
While Nurix Therapeutics seems to be in a fairly good position, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Many companies end up issuing new shares to fund future growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.
Nurix Therapeutics has a market capitalisation of US$1.5b and burnt through US$182m last year, which is 12% of the company's market value. As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution.
How Risky Is Nurix Therapeutics' Cash Burn Situation?
On this analysis of Nurix Therapeutics' cash burn, we think its cash runway was reassuring, while its increasing cash burn has us a bit worried. Cash burning companies are always on the riskier side of things, but after considering all of the factors discussed in this short piece, we're not too worried about its rate of cash burn. On another note, Nurix Therapeutics has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)
Valuation is complex, but we're here to simplify it.
Discover if Nurix Therapeutics might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About NasdaqGM:NRIX
Nurix Therapeutics
A clinical stage biopharmaceutical company, focuses on the discovery, development, and commercialization of small molecule and antibody therapies for the treatment of cancer, inflammatory conditions, and other diseases.
Flawless balance sheet with limited growth.
Market Insights
Community Narratives


