Yahoo Finance When Will ECS Botanics Holdings Ltd (ASX:ECS) Breakeven?
ECS Botanics Holdings Ltd (ASX:ECS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ECS Botanics Holdings Ltd, an agribusiness and hemp food company, cultivates and processes industrial hemp in Australia. On 30 June 2021, the AU$34m market-cap company posted a loss of AU$4.3m for its most recent financial year. Many investors are wondering about the rate at which ECS Botanics Holdings will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for ECS Botanics Holdings
ECS Botanics Holdings is bordering on breakeven, according to some Australian Pharmaceuticals analysts. They expect the company to post a final loss in 2023, before turning a profit of AU$3.2m in 2024. The company is therefore projected to breakeven around 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 104% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving ECS Botanics Holdings' 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.008% 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 ECS Botanics Holdings, so if you are interested in understanding the company at a deeper level, take a look at ECS Botanics Holdings' company page on Simply Wall St. We've also put together a list of essential factors you should further examine:
Historical Track Record: What has ECS Botanics 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ECS Botanics Holdings' board and the CEO’s background.
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.
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.
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