The Green Organic Dutchman Holdings Ltd. (TSE:TGOD): When Will It Breakeven?

The Green Organic Dutchman Holdings Ltd.'s (TSE:TGOD): The Green Organic Dutchman Holdings Ltd., through its subsidiary, The Green Organic Dutchman Ltd., operates as a cannabinoid-based research and development company in Canada. The CA$1.2b market-cap posted a loss in its most recent financial year of -CA$13.5m and a latest trailing-twelve-month loss of -CA$33.4m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is TGOD’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for TGOD.

Check out our latest analysis for Green Organic Dutchman Holdings

According to the 4 industry analysts covering TGOD, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of CA$57m in 2020. So, TGOD is predicted to breakeven approximately a few months from now. What rate will TGOD 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 56%, which is extremely buoyant. If this rate turns out to be too aggressive, TGOD may become profitable much later than analysts predict.

Underlying developments driving TGOD’s growth isn’t the focus of this broad overview, but, take into account that generally 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 I wrap up, there’s one aspect worth mentioning. TGOD currently has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which typically has high debt relative to its equity. TGOD currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of TGOD 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 TGOD, take a look at TGOD’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:

1. Valuation: What is TGOD 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 TGOD 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 Green Organic Dutchman Holdings’s board and the CEO’s back ground.
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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.