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We feel now is a pretty good time to analyse Oxford Biomedica plc's (LON:OXB) business as it appears the company may be on the cusp of a considerable accomplishment. Oxford Biomedica plc, a contract development and manufacturing organization, focuses on delivering therapies to patients worldwide. On 31 December 2024, the UK£246m market-cap company posted a loss of UK£43m for its most recent financial year. The most pressing concern for investors is Oxford Biomedica's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 7 industry analysts covering Oxford Biomedica, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of UK£12m in 2026. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 92%, 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 Oxford Biomedica's growth isn’t the focus of this broad overview, though, keep in mind 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
See our latest analysis for Oxford Biomedica
One thing we would like to bring into light with Oxford Biomedica is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Oxford Biomedica's case is 66%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Oxford Biomedica to cover in one brief article, but the key fundamentals for the company can all be found in one place – Oxford Biomedica's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
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Valuation: What is Oxford Biomedica worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Oxford Biomedica is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Oxford Biomedica’s board and the CEO’s background .
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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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.