Analyzing ReWalk Robotics’ Cash Burn: Should Shareholders Worry?

Investing in stocks can be a risky business, especially when it comes to companies that are not turning a profit. However, history has shown us that just because a business is not making money now, it doesn’t mean that the stock will go down. Take Amazon.com, for example. The company struggled to make a profit for many years after going public in 1997. But if you had bought and held Amazon shares since 1999, you would have made a huge fortune.

This brings us to the case of ReWalk Robotics (NASDAQ:RWLK). The company has been burning through cash, but does that mean investors should be worried? In this blog post, we will analyze ReWalk Robotics’ cash burn and cash reserves to determine if shareholders should be concerned.

As of March 2023, ReWalk Robotics had cash reserves of US$62m with no debt. Over the last year, the company burned through US$17m, giving it a cash runway of about 3.5 years. This means that the company has enough cash to sustain its current rate of spending for the next few years, providing it with the time and space it needs to develop its business.

However, it’s worth noting that ReWalk Robotics has been increasing its cash burn, which is up 24% from the previous year. While the company has seen a revenue growth of 6.1%, its growth profile is not particularly exciting. This raises the question of whether the company will be able to grow its business going forward.

In terms of raising more cash for growth, ReWalk Robotics may face challenges. Its cash burn of US$17m is about 50% of its market capitalization of US$35m. If the company needs to raise more funds through issuing shares, it could result in significant dilution for existing shareholders.

In conclusion, while ReWalk Robotics’ cash burn is not particularly problematic at the moment, shareholders should keep an eye on how it evolves over time. It’s important to be aware of the risks that can impact the company’s operations and to monitor any warning signs. Investing in stocks always carries risks, and it’s crucial for investors to do their own research and due diligence.

If you’re interested in exploring other companies with better fundamentals, there are resources available to help you make informed decisions. Remember to always consider your own financial situation and investment goals before making any decisions. As always, do your own research and consult with a financial advisor if needed.

This article is intended to provide general information and analysis, and should not be considered as financial advice. It’s always recommended to conduct thorough research and consider all factors before making investment decisions.

If you have any feedback on this article or want to share your thoughts, feel free to get in touch with the editorial team at Simply Wall St. Remember, investing comes with risks, but with careful consideration and research, it can lead to profitable outcomes.