When Will Curaleaf Holdings, Inc. (TSE:CURA) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Curaleaf Holdings, Inc.'s (TSE:CURA) future prospects. Curaleaf Holdings, Inc. operates a cannabis operator in the United States. The CA$4.6b market-cap company posted a loss in its most recent financial year of US$370m and a latest trailing-twelve-month loss of US$457m leading to an even wider gap between loss and breakeven. 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?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Curaleaf Holdings

Consensus from 17 of the Canadian Pharmaceuticals analysts is that Curaleaf Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$31m in 2025. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 67% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Curaleaf Holdings given that this is a high-level summary, though, keep in mind that generally 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.

Before we wrap up, there’s one issue worth mentioning. Curaleaf Holdings currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Curaleaf Holdings' case is 48%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Curaleaf Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Curaleaf Holdings' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

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. 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.