Exact Sciences Corporation (NASDAQ:EXAS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Exact Sciences Corporation provides cancer screening and diagnostic test products in the United States and internationally. The US$13b market-cap company posted a loss in its most recent financial year of US$204m and a latest trailing-twelve-month loss of US$175m shrinking the gap between loss and breakeven. As path to profitability is the topic on Exact Sciences' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Exact Sciences is bordering on breakeven, according to the 23 American Biotechs analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$146m in 2026. Therefore, the company is expected to breakeven roughly 2 years 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 71%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Exact Sciences given that this is a high-level summary, but, bear in mind that typically 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 we wrap up, there's one issue worth mentioning. Exact Sciences currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Exact Sciences' case is 80%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Exact Sciences 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 Exact Sciences is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Exact Sciences's 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. 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.