Orgenesis Inc. (NASDAQ:ORGS) On The Verge Of Breaking Even

Orgenesis Inc. (NASDAQ:ORGS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Orgenesis Inc., a biotech company, focusing on cell and gene therapies worldwide. The US$23m market-cap company posted a loss in its most recent financial year of US$15m and a latest trailing-twelve-month loss of US$14m shrinking the gap between loss and breakeven. The most pressing concern for investors is Orgenesis' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Orgenesis

According to some industry analysts covering Orgenesis, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$5.5m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 157%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Orgenesis' upcoming projects, however, bear 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Orgenesis is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Orgenesis' case is 84%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Orgenesis 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 Orgenesis, take a look at Orgenesis' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Historical Track Record: What has Orgenesis' 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 Orgenesis' 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.