Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. But while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com?
So should Zentalis Pharmaceuticals (NASDAQ:ZNTL) shareholders be worried about its cash burn? In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.
See our latest analysis for Zentalis Pharmaceuticals
Does Zentalis Pharmaceuticals Have A Long Cash Runway?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. In September 2022, Zentalis Pharmaceuticals had US$422m in cash, and was debt-free. Looking at the last year, the company burnt through US$168m. So it had a cash runway of about 2.5 years from September 2022. Arguably, that's a prudent and sensible length of runway to have. The image below shows how its cash balance has been changing over the last few years.
NasdaqGM:ZNTL Debt to Equity History December 20th 2022
How Is Zentalis Pharmaceuticals' Cash Burn Changing Over Time?
Because Zentalis Pharmaceuticals isn't currently generating revenue, we consider it an early-stage business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. With the cash burn rate up 13% in the last year, it seems that the company is ratcheting up investment in the business over time. That's not necessarily a bad thing, but investors should be mindful of the fact that will shorten the cash runway. While the past is always worth studying, it is the future that matters most of all. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.
How Easily Can Zentalis Pharmaceuticals Raise Cash?
Given its cash burn trajectory, Zentalis Pharmaceuticals shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Commonly, a business will sell new shares in itself to raise cash and drive growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.
Since it has a market capitalisation of US$1.1b, Zentalis Pharmaceuticals' US$168m in cash burn equates to about 16% of its market value. As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution.
So, Should We Worry About Zentalis Pharmaceuticals' Cash Burn?
Even though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought Zentalis Pharmaceuticals' cash runway was relatively promising. Considering all the factors discussed in this article, we're not overly concerned about the company's cash burn, although we do think shareholders should keep an eye on how it develops. On another note, Zentalis Pharmaceuticals has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies insiders are buying, and this list of stocks growth stocks (according to analyst forecasts)
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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.
即使一家企业在亏损,如果股东以合适的价格收购一家好企业,他们也有可能赚钱。例如,虽然软件即服务业务Salesforce.com在经常性收入增长的同时多年来一直亏损,但如果你从2005年开始持有股票,你确实会做得非常好。但是,尽管历史赞颂这些罕见的成功,但那些失败的往往会被遗忘;谁还记得Pets.com?
所以也应该这样Zentaris制药公司纳斯达克:ZNTL)股东担心其烧钱?在这份报告中,我们将考虑该公司的年度自由现金流为负,此后将其称为“现金消耗”。我们将首先将其现金消耗与其现金储备进行比较,以计算其现金跑道。
查看我们对Zentaris制药公司的最新分析
Zentalis制药公司有很长的现金跑道吗?
你可以通过将公司拥有的现金数量除以它花掉这些现金的速度来计算公司的现金跑道。2022年9月,Zentalis PharmPharmticals拥有4.22亿美元现金,而且没有债务。回顾去年,该公司烧掉了1.68亿美元。因此,从2022年9月开始,它的现金跑道大约有2.5年。可以说,这是一个谨慎和合理的跑道长度。下图显示了其现金余额在过去几年中的变化情况。
NasdaqGM:ZNTL债转股历史2022年12月20日
Zentalis制药公司的现金消耗是如何随着时间的推移而变化的?
由于Zentalis制药公司目前没有产生收入,我们认为这是一项处于早期阶段的业务。尽管如此,我们仍然可以检查其烧钱轨迹,作为我们评估其烧钱情况的一部分。随着去年现金消耗率上升了13%,该公司似乎正在逐步增加对这项业务的投资。这并不一定是一件坏事,但投资者应该注意这样一个事实,那将缩短现金跑道。虽然过去总是值得研究的,但最重要的是未来。因此,看看我们的分析师对该公司的预测是很有意义的。
Zentaris制药公司筹集现金的难度有多大?
鉴于其烧钱的轨迹,Zentalis制药的股东可能希望考虑一下,尽管它有坚实的现金跑道,但它筹集更多现金的难度有多大。一般来说,上市企业可以通过发行股票或承担债务来筹集新的现金。通常情况下,企业会自行发售新股,以筹集现金并推动增长。我们可以将一家公司的现金消耗与其市值进行比较,以了解一家公司需要发行多少新股才能为一年的运营提供资金。
由于Zentalis PharmPharmticals的市值为11亿美元,其1.68亿美元的现金消耗相当于其市值的16%左右。因此,我们冒险认为,该公司可以毫不费力地筹集更多现金来实现增长,尽管代价是一些股权稀释。
那么,我们应该担心Zentalis制药公司的烧钱吗?
尽管它不断增加的现金消耗让我们有点紧张,但我们不得不提到,我们认为Zentalis PharmPharmticals的现金跑道相对来说是有希望的。考虑到本文讨论的所有因素,我们并不过分担心公司的现金消耗,尽管我们确实认为股东应该密切关注公司的发展。另一方面,Zentalis制药公司已经3个警示标志(还有一点不可忽视)我们认为你应该知道这一点。
当然了,如果你把目光投向别处,你可能会发现这是一笔很棒的投资。所以让我们来看看这个免费内部人士正在买入的公司名单,以及这份名单中的成长股(根据分析师预测)
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。