Breakeven On The Horizon For CEL-SCI Corporation (NYSEMKT:CVM)

We feel now is a pretty good time to analyse CEL-SCI Corporation's (NYSEMKT:CVM) business as it appears the company may be on the cusp of a considerable accomplishment. CEL-SCI Corporation engages in the research and development of immunotherapy for the treatment of cancer and other diseases. With the latest financial year loss of US$22m and a trailing-twelve-month loss of US$30m, the US$520m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which CEL-SCI 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 CEL-SCI

Expectations from some of the American Biotechs analysts is that CEL-SCI is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$183m in 2022. So, the company is predicted to breakeven approximately 2 years from today. 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 146% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for CEL-SCI given that this is a high-level summary, however, take into account 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. CEL-SCI 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:

This article is not intended to be a comprehensive analysis on CEL-SCI, so if you are interested in understanding the company at a deeper level, take a look at CEL-SCI's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Historical Track Record: What has CEL-SCI'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 CEL-SCI'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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