Vericel Corporation (NASDAQ:VCEL) On The Verge Of Breaking Even

With the business potentially at an important milestone, we thought we'd take a closer look at Vericel Corporation's (NASDAQ:VCEL) future prospects. Vericel Corporation, a commercial-stage biopharmaceutical company, engages in the research, development, manufacture, and distribution of cellular therapies for sports medicine and severe burn care markets in North America. The US$2.4b market-cap company announced a latest loss of US$3.2m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Vericel will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Vericel

Consensus from 6 of the American Biotechs analysts is that Vericel is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$4.3m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 49% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Vericel's upcoming projects, however, keep in mind that generally 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.

One thing we’d like to point out is that Vericel has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. The company 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:

This article is not intended to be a comprehensive analysis on Vericel, so if you are interested in understanding the company at a deeper level, take a look at Vericel's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Vericel 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 Vericel 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 Vericel’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.