Loss-Making Curaleaf Holdings, Inc. (CSE:CURA) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at Curaleaf Holdings, Inc.'s (CSE:CURA) future prospects. Curaleaf Holdings, Inc. operates as an integrated medical and wellness cannabis operator in the United States. The CA$14b market-cap company announced a latest loss of US$62m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Curaleaf Holdings will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Curaleaf Holdings

According to the 14 industry analysts covering Curaleaf Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$86m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 44%, 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 Curaleaf Holdings' upcoming projects, though, take into account that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 21% 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.

Next Steps:

This article is not intended to be a comprehensive analysis on Curaleaf Holdings, so if you are interested in understanding the company at a deeper level, take a look at Curaleaf Holdings' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is Curaleaf 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 Curaleaf Holdings 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 Curaleaf Holdings’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. 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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