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Surrozen (NASDAQ:SRZN) Is In A Good Position To Deliver On Growth Plans

Simply Wall St · 5d ago

Just because a business does not make any money, does not mean that the stock will go down. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.

So, the natural question for Surrozen (NASDAQ:SRZN) shareholders is whether they should be concerned by its rate of cash burn. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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When Might Surrozen Run Out Of Money?

A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. When Surrozen last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth US$81m. In the last year, its cash burn was US$21m. That means it had a cash runway of about 3.9 years as of September 2025. A runway of this length affords the company the time and space it needs to develop the business. You can see how its cash balance has changed over time in the image below.

debt-equity-history-analysis
NasdaqCM:SRZN Debt to Equity History January 6th 2026

See our latest analysis for Surrozen

How Well Is Surrozen Growing?

It was fairly positive to see that Surrozen reduced its cash burn by 26% during the last year. But it makes us pessimistic to see that operating revenue slid 64% in that time. Considering both these metrics, we're a little concerned about how the company is developing. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

Can Surrozen Raise More Cash Easily?

Surrozen seems to be in a fairly good position, in terms of cash burn, but we still think it's worthwhile considering how easily it could raise more money if it wanted to. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Commonly, a business will sell new shares in itself to raise cash and drive growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.

Surrozen's cash burn of US$21m is about 13% of its US$164m market capitalisation. Given that situation, it's fair to say the company wouldn't have much trouble raising more cash for growth, but shareholders would be somewhat diluted.

So, Should We Worry About Surrozen's Cash Burn?

On this analysis of Surrozen's cash burn, we think its cash runway was reassuring, while its falling revenue has us a bit worried. While we're the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Surrozen's situation. Taking a deeper dive, we've spotted 6 warning signs for Surrozen you should be aware of, and 3 of them don't sit too well with us.

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