Invitae (NYSE: NVTA) announced its 2021 Q3 financial results on November 8, 2021. According to the announcement, total revenue was up 66% (3 months, YoY). On the other hand, loss from operation and net loss increased by 139% and 93%, respectively (3 months, YoY).
Among the net loss of 174 million USD (9 months), the research and development account for 284 million USD. Stock-based compensation reached 132 million USD. It was reported last several years that Invitae had conducted multiple acquisitions. However, depreciation and amortization of the acquired assets do not account for a large proportion of the net loss. Rather, Invitae has allocated the larger amount of budgets for research and development and human resources, indicating that they lay weight on up-front investments.
Meanwhile, Invitae issued convertible senior notes of 1.1 billion USD during 9 months ending September 30, 2021. In addition, public offering of common stocks accounts for 434 million USD during the same period. These financing activity seems to be intended to supplement the negative free cash flow of Invitae. Given these situation, Invitae’s stock price is likely to be subject to downward pressure due to the dilution.
We believe that the free cash flow needs to be positive in order for Invitae’s stock price to go up.
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