With the business potentially at an important milestone, we thought we'd take a closer look at Veracyte, Inc.'s (NASDAQ:VCYT) future prospects. Veracyte, Inc. operates as a diagnostics company in the United States and internationally. The US$2.3b market-cap company posted a loss in its most recent financial year of US$74m and a latest trailing-twelve-month loss of US$54m shrinking the gap between loss and breakeven. As path to profitability is the topic on Veracyte's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts' expectations for the company.

According to the 9 industry analysts covering Veracyte, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$5.4m in 2024. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 115% is expected, which signals high confidence from analysts. 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 Veracyte given that this is a high-level summary, but, keep 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 aspect worth mentioning. Veracyte currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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:

There are key fundamentals of Veracyte which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Veracyte, take a look at Veracyte's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Veracyte 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 Veracyte 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 Veracyte'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.