Analysts Expect Happy Belly Food Group Inc. (CSE:HBFG) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Happy Belly Food Group Inc.'s (CSE:HBFG) future prospects. Happy Belly Food Group Inc. provides food products in Canada. With the latest financial year loss of CA$1.8m and a trailing-twelve-month loss of CA$1.4m, the CA$152m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Happy Belly Food Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Happy Belly Food Group

Expectations from some of the Canadian Food analysts is that Happy Belly Food Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$229k in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 132% is expected, which is rather optimistic! 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 Happy Belly Food Group's upcoming projects, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Happy Belly Food Group is its debt-to-equity ratio of 155%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Happy Belly Food Group 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 Happy Belly Food Group, take a look at Happy Belly Food Group's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

1. Valuation: What is Happy Belly Food Group 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 Happy Belly Food Group 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 Happy Belly Food Group’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.

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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.