Geron (NASDAQ:GERN) Is Using Debt Safely

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Geron Corporation (NASDAQ:GERN) makes use of debt. But the real question is whether this debt is making the company risky.

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When Is Debt A Problem?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. The first step when considering a company's debt levels is to consider its cash and debt together.

How Much Debt Does Geron Carry?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Geron had US$119.3m of debt, an increase on US$83.8m, over one year. But it also has US$380.5m in cash to offset that, meaning it has US$261.3m net cash.

How Strong Is Geron's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Geron had liabilities of US$87.7m due within 12 months and liabilities of US$231.0m due beyond that. On the other hand, it had cash of US$380.5m and US$37.7m worth of receivables due within a year. So it can boast US$99.5m more liquid assets than total liabilities.

This short term liquidity is a sign that Geron could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that Geron has more cash than debt is arguably a good indication that it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Geron's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

View our latest analysis for Geron

Over 12 months, Geron reported revenue of US$183m, which is a gain of 522%, although it did not report any earnings before interest and tax. That's virtually the hole-in-one of revenue growth!

So How Risky Is Geron?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And the fact is that over the last twelve months Geron lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of US$133m and booked a US$80m accounting loss. But the saving grace is the US$261.3m on the balance sheet. That kitty means the company can keep spending for growth for at least two years, at current rates. Importantly, Geron's revenue growth is hot to trot. High growth pre-profit companies may well be risky, but they can also offer great rewards. For riskier companies like Geron I always like to keep an eye on whether insiders are buying or selling. So click here if you want to find out for yourself.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.