Market Sentiment Around Loss-Making 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 infectious diseases. With the latest financial year loss of US$30m and a trailing-twelve-month loss of US$33m, the US$1.1b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is CEL-SCI's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for CEL-SCI

According to some industry analysts covering CEL-SCI, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$61m in 2022. So, the company is predicted to breakeven just over a year 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 101% is expected, 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.

Underlying developments driving CEL-SCI's growth isn’t the focus of this broad overview, however, keep 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that CEL-SCI 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 essential factors you should further research:

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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