Neighbourly Pharmacy Inc. (TSE:NBLY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Neighbourly Pharmacy Inc. owns and operates a chain of retail pharmacies in Canada. On 26 March 2022, the CA$1.1b market-cap company posted a loss of CA$73m for its most recent financial year. Many investors are wondering about the rate at which Neighbourly Pharmacy will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 9 industry analysts covering Neighbourly Pharmacy, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of CA$14m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 99%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Neighbourly Pharmacy's growth isn’t the focus of this broad overview, but, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of Neighbourly Pharmacy which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Neighbourly Pharmacy, take a look at Neighbourly Pharmacy's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:
Valuation: What is Neighbourly Pharmacy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Neighbourly Pharmacy is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Neighbourly Pharmacy’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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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.
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