We can easily understand why investors are attracted to unprofitable companies. Although Software-As-A-Service Business Salesforce.com, for example, lost money for years, while recurring income grew, if you had shares since 2005, you would have done very well. Nevertheless, only a fool would ignore the risk that a loss company will burn its money too quickly.
So should Tango Therapeutics (Nasdaq: TNGX) Shareholders are worried about the burning of cash? In this article we define cash combustion as its annual (negative) free cash flow, which is the amount that a company spends every year to finance its growth. First we will determine his cash landing track by comparing his cash burning with his cash reserves.
This technology could replace computers: discover that the 20 shares work to realize Kwantum Computing.
You can calculate the cash runway of a company by sharing the amount of cash it has by the rate at which the money spends. When Tango Therapeutics last reported his balance in March 2025 in May 2025, it had zero debts and cash worth the value of US $ 217 million. Looking at the past year, the company burned US $ 136 million. So it had a runway of approximately 19 months from March 2025. Although that runway is not too worrying, sensible holders in the distance would look and consider what happens if the company no longer has cash. You can see how the cash balance has changed over time in the image below.
View our latest analysis for Tango Therapeutics
Some investors may find it disturbing that Tango Therapeutics is actually increasingly His burning of money, which has risen by 11% in the past year. Turnover increased by 10%in the period in the period, even if it wasn’t much. In the light of the above data, we are fairly optimistic about the business growth process. However, it is clear that the crucial factor is whether the company will grow its company in the future. So you might want to take a look at how much the company is expected to grow in the coming years.
Although Tango Therapeutics seems to be in a reasonably good position, it is still worth considering how easily the more money can yield, even to feed faster growth. In general, a listed company can cancel new cash by issuing shares or taking on debts. Usually a company will in itself sell new shares to increase cash and to stimulate growth. We can compare the cash combustion of a company with its market capitalization to get an idea of how many new shares a company should spend to finance a year of activities.
The cash combustion of Tango Therapeutics of US $ 136 million is approximately 19% of the market capitalization of US $ 708 million. As a result, we would float that the company could increase more money for growth without many problems, albeit at the expense of any dilution.
Although the increasing combustion of cash makes us a little nervous, we are forced to mention that we thought that the cash catwalk from Tango Therapeutics was relatively promising. Although we do not think that it has a problem with his burning of money, the analysis that we have done in this article does suggest that shareholders have to think carefully about the potential costs of collecting more money in the future. Taking a deeper dive, we have seen 2 Warning signals for Tango Therapeutics You have to be aware, and one of them is potentially serious.
Naturally, Maybe you will find a fantastic investment by looking elsewhere. So take a look at this free List of interesting companies, and this list of stock growth shares (according to analysts forecasts)
Feedback on this article? Worried about the content? Contact us With us immediately. As an alternative e-mail editorial team (AT) Easlewallst.com.
This article by Simply Wall St is generally in nature. We comment based on historical data and analyst forecasts that only use an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell shares and does not take your objectives or your financial situation into account. We strive to bring you in the long term -targeted analysis, powered by fundamental data. Note that our analysis may not take into account the latest price -sensitive company announcements or qualitative material. Simply Wall St has no position in the aforementioned stocks.
