Ayurcann Holdings Corp. (CSE:AYUR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ayurcann Holdings Corp. provides post-harvest outsourcing solutions to licensed cannabis producers in Canada. On 30 June 2021, the CA$21m market-cap company posted a loss of CA$278k for its most recent financial year. As path to profitability is the topic on Ayurcann Holdings' 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.
Expectations from some of the Canadian Pharmaceuticals analysts is that Ayurcann Holdings is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of CA$2.4m in 2022. The company is therefore projected to breakeven around a year 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 95% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Ayurcann Holdings' upcoming projects, however, take into account that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. 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. The company has managed its capital prudently, with debt making up 0.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Ayurcann Holdings, so if you are interested in understanding the company at a deeper level, take a look at Ayurcann Holdings' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
- Valuation: What is Ayurcann Holdings 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 Ayurcann Holdings is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ayurcann Holdings’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. 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.
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