Beleave Inc’s (CNSX:BE): Beleave Inc., together with its subsidiary, First Access Medical Inc., operates as a medical cannabis company in Canada. The company’s loss has recently broadened since it announced a -CA$8.55m loss in the full financial year, compared to the latest trailing-twelve-month loss of -CA$11.95m, moving it further away from breakeven. The most pressing concern for investors is BE’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for BE’s growth and when analysts expect the company to become profitable.See our latest analysis for Beleave
Expectation from Pharmaceuticals analysts is BE is on the verge of breakeven. They anticipate the company to incur a final loss in 2018, before generating positive profits of CA$1.83m in 2019. BE is therefore projected to breakeven around a few months from now. What rate will BE have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 51.31%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving BE’s growth isn’t the focus of this broad overview, however, bear in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing I would like to bring into light with BE is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in BE’s case is 45.91%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of BE which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at BE, take a look at BE’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further research:
- Valuation: What is BE 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 BE 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 Beleave’s board and the CEO’s back ground.
- 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.