Nowadays most investors are attracted to buy shares of unprofitable companies. It is often seen that companies that don’t make enough profits sometimes make recurring revenue. From it, long term money investors can do very well and make great profits. Having said that, NASDAQ: ABEO at https://www.webull.com/quote/nasdaq-abeo shareholders are now a bit worried about the current cash burn situation. Let’s find out how cash burns can affect ABEO’s annual free cash flow (the amount of money spent on company growth each year).
Should you expect a long ABEO cash runway?
A cash runway is that particular period when a company runs out of funding or money to spend after the current cash burn. In March 2020, when the world went through Coronavirus pandemic, Abeona Therapeutics had $116 million funding with no debt. NASDAQ: ABEO had a cash burn of $67 million last year. So, ABEO has been under a cash runway for the past 21 months. Even though it sounds negative, it is not too bad! Now, ABEO shares pricing went up by 4.87% at a value of 3.12 and it seems like the cash runway is ending. This might be good news if ABEO cash burn reduces in the coming days.
ABEO current earnings report:
In the last quarter, NASDAQ: ABEO successfully made a profit of $0.60 million and its revenues increased to $48.21 million. With a free cash flow value of -$13.71 million, ABEO’s EBITDA value is now at -$46.15 million. The company’s ROE (Return on Equity) is -82.40%, and ROA (Return on Assets) is -60.50%. ABEO has a short ratio value of 2.76 with 92.64 Million outstanding shares. As a result, ABEO is compared well with others and many investors have marked ABEO in their watch list. Of course, it is important to analyze the ABEO sustainable earnings report to reach a decision. Investors also must find out how sustainable ABEO’s current run is.
Company Outlook: How the cash burn will change with time?
ABEO has seen better growth with increased volume since the past weeks. Many investors are ready to put support behind the NASDAQ: ABEO value proposition. ABEO’s 10 days’ volume is 0.81 million and it might gain more growth in the coming weeks. Currently, the company’s EPS (earnings per share) is at -1.66. However, Abeona Therapeutics hasn’t yet produced significant operating revenue. So, it might be a bit early to expect massive revenue growth from ABEO. So, it will be interesting to see how ABEO’s cash burn changes over time. For now, it is clear that ABEO is maintaining content growth with its current company spending, and the cash burn rate is steady. You can stock trading at free commission trading app. Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.