We feel now is a pretty good time to analyse Codexis, Inc.'s (NASDAQ:CDXS) business as it appears the company may be on the cusp of a considerable accomplishment. Codexis, Inc. discovers, develops, and sells enzymes and other proteins. On 31 December 2024, the US$320m market-cap company posted a loss of US$65m for its most recent financial year. As path to profitability is the topic on Codexis' 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.

Check out our latest analysis for Codexis

According to the 7 industry analysts covering Codexis, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$5.1m in 2027. The company is therefore projected to breakeven around 2 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 58%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Codexis given that this is a high-level summary, however, take into account that generally a life science company has lumpy cash flows which are contingent on the product 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 issue worth mentioning. Codexis currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Codexis' case is 43%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Codexis 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 Codexis, take a look at Codexis' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Codexis 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 Codexis 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 Codexis’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.