Yahoo Finance When Will Cannpal Animal Therapeutics Limited (ASX:CP1) Turn A Profit?
Cannpal Animal Therapeutics Limited’s (ASX:CP1): Cannpal Animal Therapeutics Limited, a pet pharmaceutical company, focuses on research, development, and commercialization of regulatory approved medicines using compounds derived from the cannabis plant for cats, dogs, and horses in Australia. The AU$15.8m market-cap company announced a latest loss of -AU$1.7m on 30 June 2018 for its most recent financial year result. Many investors are wondering the rate at which CP1 will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for CP1.
View our latest analysis for Cannpal Animal Therapeutics
Expectation from Pharmaceuticals analysts is CP1 is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of AU$1.7m in 2020. CP1 is therefore projected to breakeven around a couple of months from now! In order to meet this breakeven date, I calculated the rate at which CP1 must grow year-on-year. It turns out an average annual growth rate of 93.3% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving CP1’s growth isn’t the focus of this broad overview, though, 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that CP1 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. CP1 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 too many aspects of CP1 to cover in one brief article, but the key fundamentals for the company can all be found in one place – CP1’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should look at:
Historical Track Record: What has CP1’s 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cannpal Animal Therapeutics’s board and the CEO’s back ground.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
