COSMO ROBOTICS (KOSDAQ:439960) Is In A Good Position To Deliver On Growth Plans
Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. 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. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.
Given this risk, we thought we'd take a look at whether COSMO ROBOTICS (KOSDAQ:439960) shareholders should be worried about its cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. The first step is to compare its cash burn with its cash reserves, to give us its 'cash runway'.
Does COSMO ROBOTICS Have A Long Cash Runway?
A company's cash runway is calculated by dividing its cash hoard by its cash burn. COSMO ROBOTICS has such a small amount of debt that we'll set it aside, and focus on the ₩17b in cash it held at June 2026. Importantly, its cash burn was ₩12b over the trailing twelve months. So it had a cash runway of approximately 18 months from June 2026. While that cash runway isn't too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash. The image below shows how its cash balance has been changing over the last few years.
Check out our latest analysis for COSMO ROBOTICS
How Well Is COSMO ROBOTICS Growing?
COSMO ROBOTICS reduced its cash burn by 5.2% during the last year, which points to some degree of discipline. Unfortunately, however, operating revenue declined by 37% during the period. Considering both these metrics, we're a little concerned about how the company is developing. Of course, we've only taken a quick look at the stock's growth metrics, here. You can take a look at how COSMO ROBOTICS has developed its business over time by checking this visualization of its revenue and earnings history.
How Easily Can COSMO ROBOTICS Raise Cash?
While COSMO ROBOTICS seems to be in a fairly good position, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund 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.
Since it has a market capitalisation of ₩244b, COSMO ROBOTICS' ₩12b in cash burn equates to about 4.8% of its market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.
How Risky Is COSMO ROBOTICS' Cash Burn Situation?
Even though its falling revenue makes us a little nervous, we are compelled to mention that we thought COSMO ROBOTICS' cash burn relative to its market cap was relatively promising. 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 COSMO ROBOTICS' situation. On another note, we conducted an in-depth investigation of the company, and identified 3 warning signs for COSMO ROBOTICS (2 shouldn't be ignored!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts)
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.