![]() ![]() We aim to bring you long-term focused research analysis driven by fundamental data. Simply Wall St has no position in the stocks mentioned. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts) Of course, you might find a fantastic investment by looking elsewhere. Taking a deeper dive, we've spotted 4 warning signs for Loop Insights you should be aware of, and 2 of them are concerning. The measures we've considered in this article lead us to believe its cash burn is actually quite concerning, and its weak cash position seems likely to cost shareholders one way or another. And although we accept its increasing cash burn wasn't as worrying as its cash runway, it was still a real negative as indeed were all the factors we considered in this article. In particular, we think its cash runway suggests it isn't in a good position to keep funding growth. There are no prizes for guessing that we think Loop Insights's cash burn is a bit of a worry. So, Should We Worry About Loop Insights's Cash Burn? Given how large that cash burn is, relative to the market value of the entire company, we'd consider it to be a high risk stock, with the real possibility of extreme dilution. Loop Insights has a market capitalisation of CA$6.1m and burnt through CA$3.9m last year, which is 64% of the company's market value. It's extremely surprising to us that the company has allowed its cash runway to get that short! You can see how its cash balance has changed over time in the image below. So it seems to us it had a cash runway of less than two months from December 2019. ![]() Importantly, its cash burn was CA$3.9m over the trailing twelve months. As at December 2019, Loop Insights had cash of CA$61k and such minimal debt that we can ignore it for the purposes of this analysis. 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. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.Ĭheck out our latest analysis for Loop Insights How Long Is Loop Insights's Cash Runway? In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. So, the natural question for Loop Insights ( CVE:MTRX) shareholders is whether they should be concerned by its rate of cash burn. But while history lauds those rare successes, those that fail are often forgotten who remembers ? 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. 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. ![]()
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