Unity Biotechnology, Inc. (NASDAQ:UBX): Is Breakeven Near?

We feel now is a pretty good time to analyse Unity Biotechnology, Inc.'s (NASDAQ:UBX) business as it appears the company may be on the cusp of a considerable accomplishment. Unity Biotechnology, Inc., a biotechnology company, engages in the research and development of therapeutics to slow, halt, or reverse diseases of aging. With the latest financial year loss of US$40m and a trailing-twelve-month loss of US$22m, the US$22m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Unity Biotechnology will turn a profit, with the big question being “when will the company 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 Unity Biotechnology

According to the 2 industry analysts covering Unity Biotechnology, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$5.6m in 2027. The company is therefore projected to breakeven around 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 54%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Unity Biotechnology's growth isn’t the focus of this broad overview, but, 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.

Before we wrap up, there’s one aspect worth mentioning. Unity Biotechnology currently 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 too many aspects of Unity Biotechnology to cover in one brief article, but the key fundamentals for the company can all be found in one place – Unity Biotechnology's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Historical Track Record: What has Unity Biotechnology'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 Unity Biotechnology'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.