Riskified, a company listed on the NYSE (ticker: RSKD), has caught the attention of investors due to its positive cash runway and potential for growth. While owning shares in unprofitable businesses can be risky, history has shown that there is money to be made if the right choices are made.
One key factor in assessing the financial health of a company is its cash burn, which represents the amount of money it spends each year to fund its growth. In September 2023, Riskified had an impressive cash balance of US$450 million and was debt-free. With a cash burn of US$8.4 million in the last year, it had a cash runway of several years.
The company has also managed to reduce its cash burn by 83% over the past twelve months, indicating that it is on the right track. Additionally, it experienced a revenue growth of 16% during the same period, demonstrating that its business is expanding. Analysts are optimistic about Riskified’s future, predicting that it will break even at a free cash flow level before its cash runway is exhausted, rendering the length of the cash runway irrelevant.
While Riskified’s financial position seems strong, it is worth considering its ability to raise additional cash if necessary. The company’s market capitalization currently stands at US$818 million, and its cash burn accounted for only 1.0% of its market value. This suggests that it could easily issue new shares or borrow funds to fuel its growth.
Overall, Riskified’s cash burn situation appears manageable, and the company is well-positioned to continue funding its growth. It is important for potential shareholders to be aware of the risks associated with investing in any stock. In the case of Riskified, there are two warning signs that should be taken into account. However, with a positive cash runway and promising growth potential, Riskified has captured the attention of investors looking for long-term opportunities.
Please note that this article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consider their individual objectives and financial situation before making any investment decisions.
Frequently Asked Questions (FAQs)
1. What is Riskified?
Riskified is a company listed on the NYSE (ticker: RSKD) that has garnered investor interest due to its positive cash runway and potential for growth.
2. What is cash burn?
Cash burn refers to the amount of money a company spends each year to finance its growth. A lower cash burn indicates better financial health.
3. What was Riskified’s cash balance and debt status in September 2023?
In September 2023, Riskified had an impressive cash balance of US$450 million and was debt-free.
4. What is Riskified’s cash runway?
Riskified’s cash runway is the amount of time a company can continue to operate using its current cash balance without needing additional funding. With a cash burn of US$8.4 million in the last year, Riskified had a cash runway of several years.
5. How much has Riskified reduced its cash burn by in the past twelve months?
Riskified has managed to reduce its cash burn by 83% in the past twelve months, showcasing that it is on the right track.
6. What is Riskified’s revenue growth in the same period?
Riskified experienced a revenue growth of 16% during the same period, indicating that its business is expanding.
7. What are analysts’ predictions about Riskified’s future?
Analysts are optimistic about Riskified’s future and predict that it will break even at a free cash flow level before its cash runway is exhausted.
8. How does Riskified’s market capitalization and cash burn compare?
Riskified’s market capitalization currently stands at US$818 million, and its cash burn accounted for only 1.0% of its market value. This suggests that the company could easily issue new shares or borrow funds to fuel its growth.
9. What are the risks associated with investing in Riskified?
While Riskified’s financial position appears strong, potential investors should be aware of the risks associated with any stock. The article mentions two warning signs that should be taken into account.
10. Is Riskified a suitable long-term investment?
With a positive cash runway and promising growth potential, Riskified has captured the attention of investors looking for long-term opportunities. However, it is essential for individuals to conduct their own research and consider their individual objectives and financial situation before making any investment decisions.
Definitions:
– NYSE: The New York Stock Exchange is the largest stock exchange in the world by market capitalization.
– Cash Burn: The rate at which a company is spending its available cash to cover its expenses.
– Cash Runway: The amount of time a company can continue to operate using its current cash balance without requiring additional funding.
– Market Capitalization: The total value of a company’s outstanding shares of stock, calculated by multiplying the share price by the number of shares outstanding.
Suggested Related Links:
– Riskified Official Website
– NYSE Website