Companies Like Bio-Works Technologies (NGM:BIOWKS) Can Afford To Invest In Growth
Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. Indeed, Bio-Works Technologies (NGM:BIOWKS) stock is up 113% in the last year, providing strong gains for shareholders. But while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com?
So notwithstanding the buoyant share price, we think it's well worth asking whether Bio-Works Technologies' cash burn is too risky. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). Let's start with an examination of the business' cash, relative to its cash burn.
When Might Bio-Works Technologies Run Out Of Money?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Bio-Works Technologies last reported its March 2026 balance sheet in May 2026, it had zero debt and cash worth kr41m. Importantly, its cash burn was kr9.6m over the trailing twelve months. So it had a cash runway of about 4.3 years from March 2026. There's no doubt that this is a reassuringly long runway. Depicted below, you can see how its cash holdings have changed over time.
View our latest analysis for Bio-Works Technologies
How Well Is Bio-Works Technologies Growing?
Happily, Bio-Works Technologies is travelling in the right direction when it comes to its cash burn, which is down 73% over the last year. And it is also great to see that the revenue is up a stonking 191% in the same time period. Overall, we'd say its growth is rather impressive. Of course, we've only taken a quick look at the stock's growth metrics, here. This graph of historic revenue growth shows how Bio-Works Technologies is building its business over time.
How Easily Can Bio-Works Technologies Raise Cash?
While Bio-Works Technologies seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end 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 kr353m, Bio-Works Technologies' kr9.6m in cash burn equates to about 2.7% of its market value. So it could almost certainly just borrow a little to fund another year's growth, or else easily raise the cash by issuing a few shares.
How Risky Is Bio-Works Technologies' Cash Burn Situation?
It may already be apparent to you that we're relatively comfortable with the way Bio-Works Technologies is burning through its cash. For example, we think its revenue growth suggests that the company is on a good path. And even its cash burn reduction was very encouraging. After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash, as it seems on track to meet its needs over the medium term. Taking an in-depth view of risks, we've identified 3 warning signs for Bio-Works Technologies that you should be aware of before investing.
Of course, you might find a fantastic investment by looking 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 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.