TILT Holdings Inc.'s (CSE:TILT) About To Shift From Loss To Profit

We feel now is a pretty good time to analyse TILT Holdings Inc.'s (CSE:TILT) business as it appears the company may be on the cusp of a considerable accomplishment. TILT Holdings Inc., a vertically-integrated technology and infrastructure company, provides various products and services across the cannabis industry in the United States, Canada, and Europe. The CA$188m market-cap company announced a latest loss of US$52m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on TILT Holdings' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for TILT Holdings

Consensus from 2 of the Canadian Pharmaceuticals analysts is that TILT Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$1.6m in 2021. So, the company is predicted to breakeven approximately a year 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 147% 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.

Given this is a high-level overview, we won’t go into details of TILT Holdings' upcoming projects, though, bear in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 26% 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 TILT Holdings, so if you are interested in understanding the company at a deeper level, take a look at TILT Holdings' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Historical Track Record: What has TILT 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 TILT 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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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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