Breakeven Is Near for Planet 13 Holdings Inc. (CSE:PLTH)

By
Simply Wall St
Published
August 14, 2021
CNSX:PLTH
Source: Shutterstock

Planet 13 Holdings Inc. (CSE:PLTH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Planet 13 Holdings Inc., a cannabis company, cultivates, produces, distributes, and markets cannabis and cannabis-infused and related products for medical and retail cannabis markets in Nevada, the United States. The CA$1.3b market-cap company’s loss lessened since it announced a US$7.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$6.1m, as it approaches breakeven. Many investors are wondering about the rate at which Planet 13 Holdings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Planet 13 Holdings

Planet 13 Holdings is bordering on breakeven, according to the 3 Canadian Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$13m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 124% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
CNSX:PLTH Earnings Per Share Growth August 15th 2021

Underlying developments driving Planet 13 Holdings' growth isn’t the focus of this broad overview, however, take into account that generally 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.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.5% 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 Planet 13 Holdings, so if you are interested in understanding the company at a deeper level, take a look at Planet 13 Holdings' company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

  1. Historical Track Record: What has Planet 13 Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Planet 13 Holdings' 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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