When Will Yield10 Bioscience, Inc. (NASDAQ:YTEN) Become Profitable?

We feel now is a pretty good time to analyse Yield10 Bioscience, Inc.'s (NASDAQ:YTEN) business as it appears the company may be on the cusp of a considerable accomplishment. Yield10 Bioscience, Inc., an agricultural bioscience company, engages in developing disruptive technologies for step-changing improvements in crop yield in the United States and Canada. The US$42m market-cap company posted a loss in its most recent financial year of US$13m and a latest trailing-twelve-month loss of US$14m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Yield10 Bioscience 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 Yield10 Bioscience

Consensus from 4 of the American Biotechs analysts is that Yield10 Bioscience is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$8.2m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 42% is expected, which signals high confidence from analysts. 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 Yield10 Bioscience's upcoming projects, however, take into account that generally 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.

Before we wrap up, there’s one aspect worth mentioning. Yield10 Bioscience currently has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Yield10 Bioscience 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 Yield10 Bioscience, take a look at Yield10 Bioscience's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Yield10 Bioscience 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 Yield10 Bioscience 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 Yield10 Bioscience’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. 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.
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