Yahoo Finance PharmaCielo Ltd.'s (CVE:PCLO) Path To Profitability
PharmaCielo Ltd. (CVE:PCLO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. PharmaCielo Ltd., together with its subsidiary, cultivates, processes, produces, and supplies medicinal-grade cannabis oil extracts, tetrahydrocannabinol, and related products to pharmacies, medical clinics, and cosmetic companies. The CA$180m market-cap company’s loss lessened since it announced a CA$35m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$33m, as it approaches breakeven. As path to profitability is the topic on PharmaCielo's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for PharmaCielo
According to the 2 industry analysts covering PharmaCielo, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of CA$68m in 2021. So, the company is predicted to breakeven just over a year 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 216% is expected, 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 PharmaCielo's growth isn’t the focus of this broad overview, however, keep in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. PharmaCielo currently has no debt on its balance sheet, which is rare for a loss-making pharma, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of PharmaCielo to cover in one brief article, but the key fundamentals for the company can all be found in one place – PharmaCielo's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:
Historical Track Record: What has PharmaCielo's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on PharmaCielo'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.
This article by Simply Wall St is general in nature. 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@simplywallst.com.
