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    We're Keeping An Eye On RocketBoots' (ASX:ROC) Cash Burn Rate

    Simply Wall St·08/28/2026 22:50:25
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    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, RocketBoots (ASX:ROC) shareholders have done very well over the last year, with the share price soaring by 113%. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.

    So notwithstanding the buoyant share price, we think it's well worth asking whether RocketBoots' cash burn is too risky. 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. The first step is to compare its cash burn with its cash reserves, to give us its 'cash runway'.

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    When Might RocketBoots Run Out Of Money?

    A company's cash runway is calculated by dividing its cash hoard by its cash burn. In June 2026, RocketBoots had AU$3.7m in cash, and was debt-free. Importantly, its cash burn was AU$5.7m over the trailing twelve months. Therefore, from June 2026 it had roughly 8 months of cash runway. That's quite a short cash runway, indicating the company must either reduce its annual cash burn or replenish its cash. The image below shows how its cash balance has been changing over the last few years.

    debt-equity-history-analysis
    ASX:ROC Debt to Equity History August 28th 2026

    View our latest analysis for RocketBoots

    How Is RocketBoots' Cash Burn Changing Over Time?

    In the last year, RocketBoots did book revenue of AU$1.0m, but its revenue from operations was less, at just AU$725k. We don't think that's enough operating revenue for us to understand too much from revenue growth rates, since the company is growing off a low base. So we'll focus on the cash burn, today. During the last twelve months, its cash burn actually ramped up 69%. While this spending increase is no doubt intended to drive growth, if the trend continues the company's cash runway will shrink very quickly. RocketBoots makes us a little nervous due to its lack of substantial operating revenue. So we'd generally prefer stocks from this list of stocks that have analysts forecasting growth.

    How Easily Can RocketBoots Raise Cash?

    Given its cash burn trajectory, RocketBoots shareholders should already be thinking about how easy it might be for it to raise further cash in the future. Companies can raise capital through either debt or equity. 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.

    RocketBoots has a market capitalisation of AU$52m and burnt through AU$5.7m last year, which is 11% of the company's market value. 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 RocketBoots' Cash Burn?

    Even though its cash runway makes us a little nervous, we are compelled to mention that we thought RocketBoots' cash burn relative to its market cap was relatively promising. Looking at the factors mentioned in this short report, we do think that its cash burn is a bit risky, and it does make us slightly nervous about the stock. Taking a deeper dive, we've spotted 5 warning signs for RocketBoots you should be aware of, and 3 of them make us uncomfortable.

    Of course RocketBoots may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.