Yahoo Finance SNDL Inc.'s (NASDAQ:SNDL) Shift From Loss To Profit
With the business potentially at an important milestone, we thought we'd take a closer look at SNDL Inc.'s (NASDAQ:SNDL) future prospects. SNDL Inc. engages in the production, distribution, and sale of cannabis products in Canada. The US$386m market-cap company posted a loss in its most recent financial year of CA$335m and a latest trailing-twelve-month loss of CA$211m shrinking the gap between loss and breakeven. The most pressing concern for investors is SNDL's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for SNDL
According to the 2 industry analysts covering SNDL, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CA$6.5m in 2025. 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 73% 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 SNDL's upcoming projects, however, bear in mind that by and large 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.
One thing we’d like to point out is that SNDL has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on SNDL, so if you are interested in understanding the company at a deeper level, take a look at SNDL's company page on Simply Wall St. We've also compiled a list of key factors you should further research:
Historical Track Record: What has SNDL'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 SNDL's 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.
