Why did LCTX's EPS trend upward in 2024?

The EPS of Lineage Cell Therapeutics Inc (LCTX) did not trend upward in 2024; in fact, it was negative for the year, with a loss of $0.09 per share. However, there are several factors that suggest the company's financial performance was improving: 1. **Revenue Growth**: The company's revenue surged to $3.8 million in Q3 2024, significantly beating analyst estimates of $0.97 million. This increase was driven by heightened collaboration revenue, particularly with Roche. Such growth in revenue can often lead to improved profitability over time, although it does not directly impact EPS if the additional revenue is invested back into the business. 2. **Reduced Net Loss**: The net loss for Q3 2024 was reduced to $3.0 million, or $0.02 per share, compared to $7.1 million, or $0.04 per share, in the same quarter of the previous year. This reduction in losses, while the company still reported a loss, indicates better operational efficiency. 3. **Operating Expense Management**: Operating expenses decreased to $7.6 million from $7.9 million in the same quarter of the previous year. This reduction, especially in R&D expenses, can contribute to a higher EPS by lowering the cost side of the equation. 4. **Cash Position**: The company maintained a strong cash balance, with $32.7 million in cash, cash equivalents, and marketable securities as of the end of Q3 2024. This financial stability can provide a buffer during periods of lower revenue or increased investment. 5. **Analyst Expectations and Price Targets**: Despite the negative EPS, analysts have adjusted their earnings estimates upward, with a consensus estimate for FY2024 EPS at ($0.09) per share, up from previous estimates. This suggests that analysts are recognizing improvements in the company's financial outlook. In conclusion, while LCTX's EPS was negative in 2024, the trend toward higher revenue, reduced net losses, and improved operating efficiency, along with positive analyst adjustments, indicate that the company's financial performance may be trending upward despite the negative EPS figure.