![]() ![]() For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company. Clearly, however, the crucial factor is whether the company will grow its business going forward. With cash burn dropping by 10% it seems management feel the company is spending enough to advance its business plans at an appropriate pace. Therefore, for the purposes of this analysis we'll focus on how the cash burn is tracking. In our view, Lumos Pharma doesn't yet produce significant amounts of operating revenue, since it reported just US$1.5m in the last twelve months. You can see how its cash balance has changed over time in the image below.ĭebt-equity-history-analysis How Is Lumos Pharma's Cash Burn Changing Over Time? That's decent, giving the company a couple years to develop its business. Therefore, from December 2022 it had 2.5 years of cash runway. Looking at the last year, the company burnt through US$27m. ![]() In December 2022, Lumos Pharma had US$67m in cash, and was debt-free. 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. View our latest analysis for Lumos Pharma When Might Lumos Pharma Run Out Of Money? First, we'll determine its cash runway by comparing its cash burn with its cash reserves. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth its negative free cash flow. Given this risk, we thought we'd take a look at whether Lumos Pharma ( NASDAQ:LUMO) shareholders should be worried about its cash burn. ![]() Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed. For example, although made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. We can readily understand why investors are attracted to unprofitable companies. ![]()
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