ODX Share Price Today

About Omega Diagnostics Group Plc

In the field of medical diagnostics, Omega Diagnostics Group PLC is a leader. In addition to Allergy and Autoimmune, Food Intolerance, Infectious/Other, and Corporate, the company operates in four business segments. Products in the company’s various product categories include those for allergy treatment, anemia treatment, autoimmunity treatment, fertility and growth hormones treatment, food intolerance treatment, infectious disease treatment, inflammation treatment, quality control treatment, thyroid hormones treatment, and tumor markers treatments. The company provides Allergodip, which is an enzyme immunoassay for the semi-quantitative detection of Specific immunoglobulin E (IgE) in serum or plasma, to patients suffering from allergen allergies. ATOZYME Ferritin is an enzyme-immunoassay (ELISA) test for the detection and quantification of ferritin in human serum that may be used to diagnose anemia and other diseases. A variety of medicines are available for the treatment of Rheumatoid Arthritis (RA), Systemic Lupus Erythematosus (SLE), Antiphospholipid Syndrome (APS), Connective Tissue Disease, Gastrointestinal Disease, and Vasculitis as well as Renal Disease. PATHOZYME-LH (Luteinizing Hormone), PATHOZYME-Prolactin, and PATHOZYME-Oestradiol are some of the fertility hormones available from the company.

 

Here’s Why We’re Watching Omega Diagnostics Group’s (LON:ODX) Cash Burn Situation

It’s a fact that holding stock in failing companies may bring in a profit. Biotech and mining exploration businesses, for example, frequently waste money for years before discovering a novel therapy or mineral. However, investors should not overlook the numerous unsuccessful enterprises that simply run out of money and fail.

Since Omega Diagnostics Group (ODX) has a high rate of capital burn, the obvious issue for investors is whether they should be worried. “Cash burn” is how we’ll refer to the company’s yearly free cash flow deficit, which we’ll refer to as “negative free cash flow”. Using the company’s financial statements, we may determine its “cash runway” by comparing the amount of money it is spending with the amount of money it has available.

See our most recent research on Omega Diagnostics Group here.

Is Omega Diagnostics Group a Cash-Strapped Company?
In order to burn down a firm’s cash reserves at its present rate of consumption, it would take the organization a certain length of time. Omega Diagnostics Group has a cash balance of UK£5.8 million and no debt as of March 2021. During the last year, the company’s cash expenditures were UK£5.2 million. So it has a 13-month cash supply from March 2021. In spite of a long financial runway, prudent investors would be concerned about what would happen if the firm went bankrupt. You can view the company’s changing cash balances in the chart below.

 

ODX Share Price Today

How Well Is Omega Diagnostics Group Growing?

Omega Diagnostics Group’s cash burn jumped 226 percent in the past year, so investors should keep that in mind. A further 11 percent decline in income has made us even more apprehensive about the situation. We’re suspicious about the company’s trajectory in light of the above-mentioned concerns. Only a small portion of this article focuses on the company’s growth statistics. You can see how Omega Diagnostics Group’s sales and profits have changed over time by looking at this graph.

 

Can Omega Diagnostics Group Raise More Cash Easily?

 

There is a possibility that Omega Diagnostics Group may need to issue more capital in the future, given the company’s dropping sales and rising cash burn. Debt or equity may be used to raise money for a company. Companies that are publicly traded have the benefit of being able to raise money and finance expansion by selling shares to investors. We can tell how much a company’s stock price will be diluted if it has to raise money to support its cash burn for another year by comparing its cash burn to its market capitalization.

Due to its £81 million market cap, a cash burn of £5.2 million is around 6.5% of Omega Diagnostics Group’s total market capitalization. Given the modest proportion, selling additional shares to investors or even taking out a loan may easily support the company’s expansion for another year.

ODX Twitter account

So, Should We Worry About Omega Diagnostics Group’s Cash Burn?

The Omega Diagnostics Group’s cash burn was comforting in comparison to its market capitalization, but its escalating cash burn is making us a little nervous. Even while we don’t believe it has an issue with its cash burn, the research we’ve done in this piece suggests that shareholders should give serious consideration to the possible costs of raising additional money in the future. Additionally, Omega Diagnostics Group has three warning indicators (and two that are potentially dangerous) that we believe you should be aware of.

Of course, Omega Diagnostics Group isn’t the ideal stock to purchase. This free collection of firms with excellent returns on equity, or this list of stocks that insiders are purchasing, may be of interest.

 

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