We're Interested To See How Perrot Duval Holding (VTX:PEDU) Uses Its Cash Hoard To Grow
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, Perrot Duval Holding (VTX:PEDU) shareholders have done very well over the last year, with the share price soaring by 143%. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.
Given its strong share price performance, we think it's worthwhile for Perrot Duval Holding shareholders to consider whether its cash burn is concerning. 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'.
When Might Perrot Duval Holding Run Out Of Money?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. As at April 2026, Perrot Duval Holding had cash of CHF828k and no debt. In the last year, its cash burn was CHF222k. Therefore, from April 2026 it had 3.7 years of cash runway. There's no doubt that this is a reassuringly long runway. You can see how its cash balance has changed over time in the image below.
See our latest analysis for Perrot Duval Holding
How Well Is Perrot Duval Holding Growing?
Perrot Duval Holding managed to reduce its cash burn by 80% over the last twelve months, which suggests it's on the right flight path. And it could also show revenue growth of 10% in the same period. We think it is growing rather well, upon reflection. Of course, we've only taken a quick look at the stock's growth metrics, here. You can take a look at how Perrot Duval Holding has developed its business over time by checking this visualization of its revenue and earnings history.
How Hard Would It Be For Perrot Duval Holding To Raise More Cash For Growth?
While Perrot Duval Holding seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.
Perrot Duval Holding has a market capitalisation of CHF24m and burnt through CHF222k last year, which is 0.9% of the company's market value. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.
How Risky Is Perrot Duval Holding's Cash Burn Situation?
As you can probably tell by now, we're not too worried about Perrot Duval Holding's cash burn. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. On this analysis its revenue growth was its weakest feature, but we are not concerned about it. After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash. Taking a deeper dive, we've spotted 2 warning signs for Perrot Duval Holding you should be aware of, and 1 of them is concerning.
Of course Perrot Duval Holding 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.
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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.