There’s no doubt that money can be built by owning shares of unprofitable businesses. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Nonetheless, only a fool would ignore the risk that a loss building company burns through its cash too quickly.
So, the natural question for Sera Prognostics (NASDAQ:SERA) shareholders is whether they should be concerned by its rate of cash burn. For the purpose of this article, we’ll define cash burn as the amount of cash the company is spfinishing each year to fund its growth (also called its negative free cash flow). We’ll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.
How Long Is Sera Prognostics’ 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 spfinishing that cash. As at September 2025, Sera Prognostics had cash of US$43m and no debt. Looking at the last year, the company burnt through US$26m. Therefore, from September 2025 it had roughly 20 months of cash runway. While that cash runway isn’t too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash. You can see how its cash balance has modifyd over time in the image below.
Check out our latest analysis for Sera Prognostics
How Is Sera Prognostics’ Cash Burn Changing Over Time?
Whilst it’s great to see that Sera Prognostics has already begun generating revenue from operations, last year it only produced US$95k, so we don’t consider it is generating significant revenue, at this point. Therefore, for the purposes of this analysis we’ll focus on how the cash burn is tracking. Over the last year its cash burn actually increased by a very significant 66%. While this spfinishing increase is no doubt intfinished to drive growth, if the trfinish continues the company’s cash runway will shrink very quickly. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.
How Hard Would It Be For Sera Prognostics To Raise More Cash For Growth?
Given its cash burn trajectory, Sera Prognostics shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Companies can raise capital through either debt or equity. Many companies finish up issuing new shares to fund future growth. We can compare a company’s cash burn to its market capitalisation to obtain a sense for how many new shares a company would have to issue to fund one year’s operations.
Sera Prognostics’ cash burn of US$26m is about 20% of its US$133m market capitalisation. Given that situation, it’s fair to declare the company wouldn’t have much trouble raising more cash for growth, but shareholders would be somewhat diluted.
How Risky Is Sera Prognostics’ Cash Burn Situation?
Even though its increasing cash burn builds us a little nervous, we are compelled to mention that we considered Sera Prognostics’ cash runway was relatively promising. We don’t consider its cash burn is particularly problematic, but after considering the range of factors in this article, we do consider shareholders should be monitoring how it modifys over time. On another note, we conducted an in-depth investigation of the company, and identified 4 warning signs for Sera Prognostics (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by seeing elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts)
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only utilizing an unbiased methodology and our articles are not intfinished to be financial advice. It does not constitute a recommfinishation to purchase or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focapplyd 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.
