Precigen, Inc.'s (NASDAQ:PGEN) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Precigen, Inc.'s (NASDAQ:PGEN) future prospects. Precigen, Inc. operates as a discovery and clinical-stage biopharmaceutical company that develops gene and cell therapies using precision technology to target diseases in therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. The US$326m market-cap company announced a latest loss of US$96m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Precigen's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Precigen

Consensus from 5 of the American Biotechs analysts is that Precigen is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$80m in 2026. The company is therefore projected to breakeven around 2 years 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 55% 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.

We're not going to go through company-specific developments for Precigen given that this is a high-level summary, though, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Precigen has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Precigen 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 Precigen, take a look at Precigen's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

1. Valuation: What is Precigen 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 Precigen 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 Precigen’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.