Close Menu
Invest Insider News
    Facebook X (Twitter) Instagram
    Friday, July 4
    Facebook X (Twitter) Instagram Pinterest Vimeo
    Invest Insider News
    • Home
    • Bitcoin
    • Commodities
    • Finance
    • Investing
    • Property
    • Stock Market
    • Utilities
    Invest Insider News
    Home»Investing»Is Heidelberg Pharma (ETR:HPHA) In A Good Position To Invest In Growth?
    Investing

    Is Heidelberg Pharma (ETR:HPHA) In A Good Position To Invest In Growth?

    July 13, 20244 Mins Read


    Just because a business does not make any money, does not mean that the stock will go down. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.

    Given this risk, we thought we’d take a look at whether Heidelberg Pharma (ETR:HPHA) shareholders should 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’. First, we’ll determine its cash runway by comparing its cash burn with its cash reserves.

    See our latest analysis for Heidelberg Pharma

    How Long Is Heidelberg Pharma’s 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 May 2024, Heidelberg Pharma had €43m in cash, and was debt-free. In the last year, its cash burn was €33m. So it had a cash runway of approximately 16 months from May 2024. That’s not too bad, but it’s fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. Depicted below, you can see how its cash holdings have changed over time.

    debt-equity-history-analysisdebt-equity-history-analysis

    debt-equity-history-analysis

    How Well Is Heidelberg Pharma Growing?

    Heidelberg Pharma reduced its cash burn by 7.5% during the last year, which points to some degree of discipline. But the revenue dip of 13% in the same period was a bit concerning. In light of the data above, we’re fairly sanguine about the business growth trajectory. 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 Hard Would It Be For Heidelberg Pharma To Raise More Cash For Growth?

    While Heidelberg Pharma seems to be in a fairly good position, it’s still worth considering how easily it could raise more cash, even just to fuel faster growth. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Many companies end up issuing new shares to fund future 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.

    Heidelberg Pharma has a market capitalisation of €122m and burnt through €33m last year, which is 27% of the company’s market value. That’s fairly notable cash burn, so if the company had to sell shares to cover the cost of another year’s operations, shareholders would suffer some costly dilution.

    So, Should We Worry About Heidelberg Pharma’s Cash Burn?

    Even though its falling revenue makes us a little nervous, we are compelled to mention that we thought Heidelberg Pharma’s cash runway was relatively promising. Even though we don’t think it has a problem with its cash burn, the analysis we’ve done in this article does suggest that shareholders should give some careful thought to the potential cost of raising more money in the future. Taking an in-depth view of risks, we’ve identified 2 warning signs for Heidelberg Pharma that you should be aware of before investing.

    Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)

    Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

    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.

    Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleQ3 Crypto Market Prediction Amid Bitcoin Sales and Fed Rate Cuts
    Next Article Latest Market News Today Live Updates July 13, 2024: IREDA share price: Experts see big upside after strong Q1 results 2024. Buy or sell?

    Related Posts

    Investing

    Graphique CAC 40 direct en temps réel

    July 2, 2025
    Investing

    Historique des données S&P 500 Futures

    July 1, 2025
    Investing

    Analyses et prévisions relatives aux crypto-monnaies

    June 29, 2025
    Leave A Reply Cancel Reply

    Top Posts

    How is the UK Commercial Property Market Performing?

    December 31, 2000

    Action Ganglong China Property Group Limited | Cours 6968 Bourse Hong Kong S.E.

    July 31, 2007

    les fondamentaux de l’or restent bons

    September 4, 2007
    Stay In Touch
    • Facebook
    • YouTube
    • TikTok
    • WhatsApp
    • Twitter
    • Instagram
    Latest Reviews
    Investing

    Retail investors turn less bullish on stocks, AAII survey shows By Investing.com

    October 25, 2024
    Stock Market

    London bankers scour market for IPO reboot after Shein stalls

    May 11, 2025
    Property

    Ellen DeGeneres buys property in the UK two years ahead of her retirement from showbiz

    October 13, 2024
    What's Hot

    NCDEX plans foray into equity & derivatives with Rs 400-600 crore investment: Report – Commodities News

    February 12, 2025

    CION Investment Corp reports a net investment income of $0.43 per share By Investing.com

    August 8, 2024

    Les principales cryptomonnaies augmentent ; le bitcoin se rapproche de 99 000 $. -Le 20 février 2025 à 22:00

    February 20, 2025
    Most Popular

    Vrai ou faux. Les États-Unis financent-ils plus largement l’Ukraine que l’Europe, comme l’affirme Donald Trump ?

    February 20, 2025

    L’IA prédit le prix du bitcoin pour le 1er juillet 2025

    June 14, 2025

    Another China shadow bank seeks state help as trust sector reels

    April 21, 2025
    Editor's Picks

    BTC cycle to top at $100k? Bitcoin MACD crossover gives clues for investors

    October 25, 2024

    VSE Corporation appoints new CFO and Chief Growth Officer By Investing.com

    August 20, 2024

    Stock Market News and Research Tools

    October 24, 2024
    Facebook X (Twitter) Instagram Pinterest Vimeo
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions
    © 2025 Invest Insider News

    Type above and press Enter to search. Press Esc to cancel.