When Will Delivra Health Brands Inc. (CVE:DHB) Become Profitable?

Delivra Health Brands Inc. (CVE:DHB) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Delivra Health Brands Inc. through its subsidiaries, provides lifestyle and wellness products to consumers and patients in regulated markets worldwide. The CA$13m market-cap company posted a loss in its most recent financial year of CA$184k and a latest trailing-twelve-month loss of CA$708k leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Delivra Health Brands 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 Delivra Health Brands

According to some industry analysts covering Delivra Health Brands, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$163k in 2025. So, the company is predicted to breakeven just over a year from now. 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 167% is expected, 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 Delivra Health Brands' upcoming projects, however, keep in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Delivra Health Brands is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Delivra Health Brands' case is 57%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Delivra Health Brands to cover in one brief article, but the key fundamentals for the company can all be found in one place – Delivra Health Brands' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Delivra Health Brands 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 Delivra Health Brands 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 Delivra Health Brands’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.