Burcon NutraScience Corporation (TSE:BU) Is Expected To Breakeven In The Near Future

We feel now is a pretty good time to analyse Burcon NutraScience Corporation's (TSE:BU) business as it appears the company may be on the cusp of a considerable accomplishment. Burcon NutraScience Corporation, together with its subsidiaries, develops plant proteins and ingredients for use in the food and beverage industries in Canada. The CA$22m market-cap company posted a loss in its most recent financial year of CA$7.4m and a latest trailing-twelve-month loss of CA$8.1m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Burcon NutraScience'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.

See our latest analysis for Burcon NutraScience

Expectations from some of the Canadian Chemicals analysts is that Burcon NutraScience is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of CA$3.0m in 2026. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 152% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Burcon NutraScience given that this is a high-level summary, 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 issue worth mentioning. Burcon NutraScience currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Burcon NutraScience 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 Burcon NutraScience, take a look at Burcon NutraScience's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is Burcon NutraScience 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 Burcon NutraScience 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 Burcon NutraScience’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.