$0.00
$2.85
bear $0.00
base $0.00
bull $2.85
margin of safety $1.00
market price* $16.35
Business condition attached to the margin of safety
Owner earnings (operating cash flow after removing working-capital swings, less stock compensation and maintenance capital spending) must be at or near break-even for at least two consecutive quarters, showing the losses are ending without new share issuance.
Beta Bionics sells the iLet, an insulin pump that uses an adaptive closed-loop algorithm to dose insulin automatically, plus the single-use infusion sets and supplies that go with it. It began selling in May 2023 and went public in January 2025. Net sales grew from $12.0 million in 2023 to $65.1 million in 2024 and $100.3 million in 2025. In 2025, $75.8 million came through durable medical equipment distributors and $24.4 million through pharmacy benefit plans, and the pharmacy share reached 30% of sales in the fourth quarter. The company is still losing money heavily: a net loss of $73.2 million in 2025, $54.8 million in 2024 and $44.1 million in 2023. How we measure it: owner earnings are operating cash flow, with the swings from building inventory and receivables taken out, less stock-based compensation, less the capital spending needed just to stay in business. On that basis owner earnings were negative in every year: about -$33.2 million in 2023, -$43.5 million in 2024 and -$61.1 million in 2025 (2025: operating cash flow of -$50.9 million, plus $9.9 million of working-capital investment removed, less $16.4 million of stock compensation, less $3.7 million of maintenance capital spending). Per share this reads -$1.51 for 2025, but earlier years are on a much smaller pre-IPO share count, so the per-share history is not comparable. Losses widened by roughly 40% from 2024 to 2025, and in the first half of 2026 stock compensation rose to $12.4 million from $7.6 million a year earlier while operating cash burn was $38.5 million against $33.6 million. We therefore assume no improvement in year one. What the business is worth: we credit only growth that is secured or is the output of a long-proven process. Beta Bionics has three years of selling history, no profitable year and no record through a downturn, so revenue growth, the planned Mint tubeless patch pump (targeted by the company for launch by the end of 2027 and not yet cleared), and any future margin gains are left out. What is real today is the cash: $264.7 million of cash and investments at December 31, 2025, raised almost entirely from selling shares rather than borrowing. That is about $5.94 per share on roughly 44.5 million shares, but the business consumed about $61 million of owner earnings in 2025, so the cash is being spent rather than kept. Bear case, $0 per share: losses continue at the 2025 pace. At about $61 million a year the cash would last roughly four years, and nothing named and evidenced turns the business profitable before then. The company also received an FDA Warning Letter on January 29, 2026 citing deficiencies in its responses to inspection observations, which adds risk to the only product it sells. It would need to raise more money, diluting existing holders, and we assign no value to what the shares would be after that. Base case, $0 per share: the same burn continues, so the cash on hand is spent on losses over about four years and is not returned to shareholders. We cannot name evidenced profits that would change this, so the shares are valued at nothing. Bull case, $2.85 per share: management reaches break-even after two more years of losses at the 2025 rate and then keeps what is left, with no value credited for any profits. Cash of $264.7 million less two years of $61.1 million burn leaves $142.5 million, worth $126.8 million discounted two years at 6%, or $2.85 on 44.5 million shares. Even this case gives no credit for revenue growth continuing. What would make this wrong: if sales keep growing near the 2025 pace of 54% while spending stays flat, break-even could arrive well before the cash runs out, and the business would be worth much more than we show. We do not count that because it has not yet happened. The 2025 net loss of $73.2 million is larger than the cash burn partly because of stock compensation and non-cash changes in warrant values; our measure charges stock compensation as a real cost. Some components come from a small number of suppliers, some in Switzerland, Mexico, China and Taiwan, a dependence noted in the filings.