Mesoblast Limited’s (ASX:MSB): Mesoblast Limited develops cell-based medicines. With the latest financial year loss of -US$76.81M and a trailing-twelve month of -US$30.28M, the AU$699.91M 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. In this article, I will touch on the expectations for MSB’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Mesoblast

According to the industry analysts covering MSB, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$11.48M in 2020. Therefore, MSB is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, I calculated the rate at which MSB must grow year-on-year. It turns out an average annual growth rate of 63.53% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving MSB’s growth isn’t the focus of this broad overview, though, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one aspect worth mentioning. MSB currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. MSB 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 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 pertinent factors you should look at:

1. 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.

2. 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.

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.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.