Applied DNA Sciences, Inc. (NASDAQ:APDN): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Applied DNA Sciences, Inc.'s (NASDAQ:APDN) future prospects. Applied DNA Sciences, Inc. develops and markets DNA-based technology solutions for use in the nucleic acid-based in vitro diagnostics and preclinical nucleic-acid based drug development and manufacturing markets; and for supply chain security, anti-counterfeiting, and anti-theft technology purposes applications in the United States, Europe, and Asia. The US$83m market-cap company posted a loss in its most recent financial year of US$13m and a latest trailing-twelve-month loss of US$15m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Applied DNA Sciences' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Applied DNA Sciences

Applied DNA Sciences is bordering on breakeven, according to the 3 American Electronic analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$552k in 2022. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 67% year-on-year, on average, 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 Applied DNA Sciences' growth isn’t the focus of this broad overview, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 15% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Applied DNA Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Applied DNA Sciences' company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Historical Track Record: What has Applied DNA Sciences' 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 Applied DNA Sciences' 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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