Organic Garage Ltd. (CVE:OG): Are Analysts Optimistic?

Organic Garage Ltd. (CVE:OG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Organic Garage Ltd. owns and operates grocery stores that sell natural and organic products to consumers in Canada. The CA$9.0m market-cap company’s loss lessened since it announced a CA$5.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$3.8m, as it approaches breakeven. Many investors are wondering about the rate at which Organic Garage will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Organic Garage

Expectations from some of the Canadian Consumer Retailing analysts is that Organic Garage is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of CA$1.1m in 2022. The company is therefore projected to breakeven around 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 106% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Organic Garage's upcoming projects, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Organic Garage is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Organic Garage's case is 92%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Organic Garage 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 Organic Garage, take a look at Organic Garage's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Organic Garage 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 Organic Garage 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 Organic Garage’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.

When trading Organic Garage or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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