Is Senseonics Holdings (NASDAQ:SENS) Weighed On By Its Debt Load?
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that Senseonics Holdings, Inc. (NASDAQ:SENS) does use debt in its business. But the real question is whether this debt is making the company risky.
Why Does Debt Bring Risk?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
How Much Debt Does Senseonics Holdings Carry?
The image below, which you can click on for greater detail, shows that Senseonics Holdings had debt of US$35.3m at the end of September 2025, a reduction from US$53.8m over a year. However, its balance sheet shows it holds US$111.0m in cash, so it actually has US$75.7m net cash.
A Look At Senseonics Holdings' Liabilities
We can see from the most recent balance sheet that Senseonics Holdings had liabilities of US$21.1m falling due within a year, and liabilities of US$40.7m due beyond that. On the other hand, it had cash of US$111.0m and US$9.37m worth of receivables due within a year. So it actually has US$58.6m more liquid assets than total liabilities.
This surplus suggests that Senseonics Holdings is using debt in a way that is appears to be both safe and conservative. Due to its strong net asset position, it is not likely to face issues with its lenders. Succinctly put, Senseonics Holdings boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Senseonics Holdings can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
Check out our latest analysis for Senseonics Holdings
In the last year Senseonics Holdings wasn't profitable at an EBIT level, but managed to grow its revenue by 32%, to US$29m. Shareholders probably have their fingers crossed that it can grow its way to profits.
So How Risky Is Senseonics Holdings?
We have no doubt that loss making companies are, in general, riskier than profitable ones. And in the last year Senseonics Holdings had an earnings before interest and tax (EBIT) loss, truth be told. And over the same period it saw negative free cash outflow of US$56m and booked a US$64m accounting loss. However, it has net cash of US$75.7m, so it has a bit of time before it will need more capital. With very solid revenue growth in the last year, Senseonics Holdings may be on a path to profitability. Pre-profit companies are often risky, but they can also offer great rewards. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. Be aware that Senseonics Holdings is showing 4 warning signs in our investment analysis , and 2 of those are concerning...
Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.
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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 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.