Mesoblast Limited’s (ASX:MSB): Mesoblast Limited, a biopharmaceutical company, develops and commercializes allogeneic cellular medicines. With the latest financial year loss of -US$89.8m and a trailing-twelve month of -US$75.8m, the AU$691m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on MSB’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for MSB.
View our latest analysis for Mesoblast
According to the 7 industry analysts covering MSB, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$371m in 2023. So, MSB is predicted to breakeven approximately 3 years from now. What rate will MSB have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 75%, which is extremely buoyant. If this rate turns out to be too aggressive, MSB may become profitable much later than analysts predict.
ASX:MSB Past and Future Earnings, March 18th 2020Given this is a high-level overview, I won’t go into details of MSB’s upcoming projects, but, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before I wrap up, there’s one aspect worth mentioning. MSB has managed its capital prudently, with debt making up 17% of equity. This means that MSB 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 key fundamentals of MSB which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at MSB, take a look at MSB’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further examine:
- Historical Track Record: What has MSB’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Mesoblast’s board and the CEO’s back ground.
Not a advice!
