With the business potentially at an important milestone, we thought we'd take a closer look at Mesoblast Limited's (ASX:MSB) future prospects. Mesoblast Limited engages in the development of regenerative medicine products in Australia, the United States, Singapore, and Switzerland. On 30 June 2024, the AU$1.5b market-cap company posted a loss of US$88m for its most recent financial year. Many investors are wondering about the rate at which Mesoblast 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.

Check out our latest analysis for Mesoblast

Mesoblast is bordering on breakeven, according to the 6 Australian Biotechs analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$115m in 2027. So, the company is predicted to breakeven approximately 3 years from now. 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 61%, 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 Mesoblast given that this is a high-level summary, however, 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 24% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Mesoblast 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 Mesoblast 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 Mesoblast’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.