When Can We Expect A Profit From Burcon NutraScience Corporation (TSE:BU)?

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. With the latest financial year loss of CA$7.4m and a trailing-twelve-month loss of CA$8.1m, the CA$33m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Burcon NutraScience's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Burcon NutraScience is bordering on breakeven, according to some Canadian Chemicals analysts. They expect the company to post a final loss in 2025, before turning a profit of CA$3.0m in 2026. 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 152% 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.

We're not going to go through company-specific developments for Burcon NutraScience given that this is a high-level summary, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Burcon NutraScience

One thing we would like to bring into light with Burcon NutraScience is it 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:

This article is not intended to be a comprehensive analysis on Burcon NutraScience, so if you are interested in understanding the company at a deeper level, take a look at Burcon NutraScience's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

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.