Freshlocal Solutions Inc. (TSE:LOCL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Freshlocal Solutions Inc. provides end-to-end grocery e-commerce solutions. The CA$16m market-cap company posted a loss in its most recent financial year of CA$39m and a latest trailing-twelve-month loss of CA$31m shrinking the gap between loss and breakeven. As path to profitability is the topic on Freshlocal Solutions' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 3 of the Canadian Consumer Retailing analysts is that Freshlocal Solutions is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of CA$5.8m in 2024. So, the company is predicted to breakeven approximately 2 years 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 82% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Freshlocal Solutions' upcoming projects, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Freshlocal Solutions is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
This article is not intended to be a comprehensive analysis on Freshlocal Solutions, so if you are interested in understanding the company at a deeper level, take a look at Freshlocal Solutions' company page on Simply Wall St. We've also put together a list of key factors you should further research:
Historical Track Record: What has Freshlocal Solutions' 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 Freshlocal Solutions' 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.
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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.