Vericel Corporation (NASDAQ:VCEL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Vericel Corporation, a commercial-stage biopharmaceutical company, engages in the research, development, manufacture, and distribution of cellular therapies for sports medicine and severe burn care markets in North America. The US$2.2b market-cap company announced a latest loss of US$3.2m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Vericel will turn a profit, with the big question being "when will the company breakeven?" We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Consensus from 6 of the American Biotechs analysts is that Vericel is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$4.4m in 2024. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 49%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Vericel's growth isn't the focus of this broad overview, however, bear in mind that by and large 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.

One thing we'd like to point out is that Vericel has no debt on its balance sheet, which is rare for a loss-making 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 Vericel 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 Vericel, take a look at Vericel's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is Vericel 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 Vericel 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 Vericel'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.