Precigen, Inc. (NASDAQ:PGEN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Precigen, Inc.,a discovery and clinical-stage biopharmaceutical company, develops gene and cell therapies using precision technology to target diseases in areas of immuno-oncology, autoimmune disorders, and infectious diseases. With the latest financial year loss of US$126m and a trailing-twelve-month loss of US$426m, the US$1.6b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Precigen's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Precigen is bordering on breakeven, according to the 3 American Biotechs analysts. They expect the company to post a final loss in 2026, before turning a profit of US$29m in 2027. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% 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.

We're not going to go through company-specific developments for Precigen given that this is a high-level summary, though, 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 would like to bring into light with Precigen is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 too many aspects of Precigen to cover in one brief article, but the key fundamentals for the company can all be found in one place – Precigen's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Historical Track Record: What has Precigen's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Precigen'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.

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.