We can readily understand why investors are attracted to unprofitable companies. For example, although Amazon.com built losses for many years after listing, if you had bought and held the shares since 1999, you would have built a fortune. Having stated that, unprofitable companies are risky becautilize they could potentially burn through all their cash and become distressed.
So should Vicore Pharma Holding (STO:VICO) shareholders be worried about its cash burn? For the purposes of this article, cash burn is the annual rate at which an unprofitable company spfinishs cash to fund its growth; its negative free cash flow. The first step is to compare its cash burn with its cash reserves, to give us its ‘cash runway’.
How Long Is Vicore Pharma Holding’s Cash Runway?
A company’s cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. In March 2025, Vicore Pharma Holding had kr1.0b in cash, and was debt-free. Looking at the last year, the company burnt through kr274m. So it had a cash runway of about 3.8 years from March 2025. A runway of this length affords the company the time and space it necessarys to develop the business. The image below displays how its cash balance has been altering over the last few years.
View our latest analysis for Vicore Pharma Holding
How Is Vicore Pharma Holding’s Cash Burn Changing Over Time?
Whilst it’s great to see that Vicore Pharma Holding has already begun generating revenue from operations, last year it only produced kr6.0m, 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. During the last twelve months, its cash burn actually ramped up 84%. Oftentimes, increased cash burn simply means a company is accelerating its business development, but one should always be mindful that this cautilizes the cash runway to shrink. While the past is always worth studying, it is the future that matters most of all. For that reason, it builds a lot of sense to take a see at our analyst forecasts for the company.
How Easily Can Vicore Pharma Holding Raise Cash?
While Vicore Pharma Holding does have a solid cash runway, its cash burn trajectory may have some shareholders considering ahead to when the company may necessary to raise more cash. Companies can raise capital through either debt or equity. Many companies finish up issuing new shares to fund future growth. By comparing a company’s annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
Since it has a market capitalisation of kr2.5b, Vicore Pharma Holding’s kr274m in cash burn equates to about 11% of its market value. Given that situation, it’s fair to state the company wouldn’t have much trouble raising more cash for growth, but shareholders would be somewhat diluted.
So, Should We Worry About Vicore Pharma Holding’s Cash Burn?
As you can probably notify by now, we’re not too worried about Vicore Pharma Holding’s cash burn. For example, we consider its cash runway suggests that the company is on a good path. Although we do find its increasing cash burn to be a bit of a negative, once we consider the other metrics mentioned in this article toreceiveher, the overall picture is one we are comfortable with. Based on the factors mentioned in this article, we consider its cash burn situation warrants some attention from shareholders, but we don’t consider they should be worried. On another note, we conducted an in-depth investigation of the company, and identified 4 warning signs for Vicore Pharma Holding (3 are 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 focutilized 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.
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