With the business potentially at an important milestone, we thought we'd take a closer look at Exact Sciences Corporation's (NASDAQ:EXAS) future prospects. Exact Sciences Corporation provides cancer screening and diagnostic test products in the United States and internationally. The US$9.9b market-cap company posted a loss in its most recent financial year of US$204m and a latest trailing-twelve-month loss of US$214m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Exact Sciences' 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.

See our latest analysis for Exact Sciences

Exact Sciences is bordering on breakeven, according to the 24 American Biotechs analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$67m in 2026. Therefore, the company is expected 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 59% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Exact Sciences' growth isn’t the focus of this broad overview, but, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. 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 issue worth mentioning. Exact Sciences currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Exact Sciences' case is 80%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Exact Sciences 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 Exact Sciences 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 Exact Sciences’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.