Compugen Ltd. (NASDAQ:CGEN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Compugen Ltd., a clinical-stage therapeutic discovery and development company, researches, develops, and commercializes therapeutic and product candidates in Israel, the United States, and Europe. The US$147m market-cap company’s loss lessened since it announced a US$19m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$17m, as it approaches breakeven. As path to profitability is the topic on Compugen'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.

View our latest analysis for Compugen

Consensus from 2 of the American Biotechs analysts is that Compugen is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$25m in 2025. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 50% 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 Compugen's upcoming projects, but, take into account that typically 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 we wrap up, there’s one aspect worth mentioning. Compugen currently has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Compugen 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 Compugen 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 Compugen’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.