Here's Why We're Not Too Worried About Thirdeye Systems' (TLV:THES) Cash Burn Situation
Just because a business does not make any money, does not mean that the stock will go down. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. 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 should Thirdeye Systems (TLV:THES) shareholders 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. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.
When Might Thirdeye Systems Run Out Of Money?
A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. As at June 2026, Thirdeye Systems had cash of ₪29m and no debt. Importantly, its cash burn was ₪25m over the trailing twelve months. So it had a cash runway of approximately 14 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. You can see how its cash balance has changed over time in the image below.
See our latest analysis for Thirdeye Systems
How Well Is Thirdeye Systems Growing?
Thirdeye Systems boosted investment sharply in the last year, with cash burn ramping by 56%. While that certainly gives us pause for thought, we take a lot of comfort in the strong annual revenue growth of 50%. On balance, we'd say the company is improving over time. Of course, we've only taken a quick look at the stock's growth metrics, here. This graph of historic revenue growth shows how Thirdeye Systems is building its business over time.
How Easily Can Thirdeye Systems Raise Cash?
Even though it seems like Thirdeye Systems is developing its business nicely, we still like to consider how easily it could raise more money to accelerate growth. 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.
Thirdeye Systems' cash burn of ₪25m is about 13% of its ₪184m 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.
How Risky Is Thirdeye Systems' Cash Burn Situation?
On this analysis of Thirdeye Systems' cash burn, we think its revenue growth was reassuring, while its increasing cash burn has us a bit worried. Cash burning companies are always on the riskier side of things, but after considering all of the factors discussed in this short piece, we're not too worried about its rate of cash burn. On another note, we conducted an in-depth investigation of the company, and identified 4 warning signs for Thirdeye Systems (3 are a bit unpleasant!) that you should be aware of before investing here.
If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow.
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