Veracyte, Inc. (NASDAQ:VCYT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Veracyte, Inc. operates as a diagnostics company in the United States and internationally. With the latest financial year loss of US$74m and a trailing-twelve-month loss of US$9.3m, the US$3.3b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Veracyte's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Veracyte

Veracyte is bordering on breakeven, according to the 11 American Biotechs analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$37m in 2025. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 46% year-on-year, on average, 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.

Underlying developments driving Veracyte's growth isn’t the focus of this broad overview, but, bear in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. 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 usually has a high level of 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 compiled a list of key factors 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.