TILT Holdings Inc (TLLTF)

[JohnCM]

TILT Holdings Inc.'s (CSE:TILT) About To Shift From Loss To Profit

By Simply Wall St
Published May 12, 2021
CNSX:TILT

We feel now is a pretty good time to analyse TILT Holdings Inc.'s (CSE:TILT) business as it appears the company may be on the cusp of a considerable accomplishment. TILT Holdings Inc., a vertically-integrated technology and infrastructure company, provides various products and services across the cannabis industry in the United States, Canada, and Europe. The CA$188m market-cap company announced a latest loss of US$52m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on TILT Holdings' 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.

See our latest analysis for TILT Holdings

Consensus from 2 of the Canadian Pharmaceuticals analysts is that TILT Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$1.6m in 2021. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 147% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

CNSX:TILT Earnings Per Share Growth May 12th 2021
Given this is a high-level overview, we won’t go into details of TILT Holdings' upcoming projects, though, bear in mind that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 26% 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.