2seventy bio, Inc. (NASDAQ:TSVT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 2seventy bio, Inc., a cell and gene therapy company, focuses on the research, development, and commercialization of treatments for cancer in the United States. With the latest financial year loss of US$218m and a trailing-twelve-month loss of US$95m, the US$213m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which 2seventy bio will turn a profit, with the big question being "when will the company breakeven?" In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 5 industry analysts covering 2seventy bio, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$17m in 2026. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 76% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of 2seventy bio's upcoming projects, though, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there's one issue worth mentioning. 2seventy bio currently has a debt-to-equity ratio of 107%. Typically, debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of 2seventy bio which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at 2seventy bio, take a look at 2seventy bio's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Historical Track Record: What has 2seventy bio's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on 2seventy bio's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.