Selecta Biosciences Inc’s (NASDAQ:SELB): Selecta Biosciences, Inc., a clinical-stage biopharmaceutical company, researches and develops nanoparticle immunomodulatory drugs for the treatment and prevention of human diseases. The company’s loss has recently broadened since it announced a -US$65.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$68.9m, moving it further away from breakeven. As path to profitability is the topic on SELB’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for SELB.
View our latest analysis for Selecta Biosciences
Expectation from Biotechs analysts is SELB is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$49.9m in 2021. Therefore, SELB is expected to breakeven roughly a few months from now. How fast will SELB have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 66.1% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, SELB may become profitable much later than analysts predict.
Underlying developments driving SELB’s growth isn’t the focus of this broad overview, though, keep in mind that generally 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.
Before I wrap up, there’s one issue worth mentioning. SELB currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in SELB’s case is 87.4%. 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 SELB to cover in one brief article, but the key fundamentals for the company can all be found in one place – SELB’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:
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Historical Track Record: What has SELB’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.
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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 Selecta Biosciences’s board and the CEO’s back ground.
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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.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.