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Loss-Making Neighbourly Pharmacy Inc. (TSE:NBLY) Expected To Breakeven In The Medium-Term

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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. With the latest financial year loss of CA$91m and a trailing-twelve-month loss of CA$164m, the CA$1.1b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Neighbourly Pharmacy's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Neighbourly Pharmacy

Neighbourly Pharmacy is bordering on breakeven, according to the 4 Canadian Consumer Retailing analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CA$34m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Neighbourly Pharmacy's growth isn’t the focus of this broad overview, though, bear in mind that by and large 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 27% 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.

Next Steps:

This article is not intended to be a comprehensive analysis on Neighbourly Pharmacy, so if you are interested in understanding the company at a deeper level, take a look at Neighbourly Pharmacy's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

  1. 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.

  2. 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.

  3. 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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