Market Sentiment Around Loss-Making Natera, Inc. (NASDAQ:NTRA)

Natera, Inc. (NASDAQ:NTRA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Natera, Inc., a diagnostics company, develops and commercializes molecular testing services worldwide. The US$23b market-cap company posted a loss in its most recent financial year of US$435m and a latest trailing-twelve-month loss of US$215m shrinking the gap between loss and breakeven. As path to profitability is the topic on Natera's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Natera

According to the 19 industry analysts covering Natera, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$24m in 2026. The company is therefore projected to breakeven just over a year from now. 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 56% 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 Natera's upcoming projects, though, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Natera is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Natera's case is 42%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Natera to cover in one brief article, but the key fundamentals for the company can all be found in one place – Natera's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Natera worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Natera is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Natera’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.