Replies to post #2255 on Aleafia Health Inc. (ALEAF)

[FUNMAN]

Good news --->>> Aleafia Health Inc. (TSE:AH) Is Expected To Breakeven In The Near Future

Simply Wall St
November 13, 2020

Even better, this is NOT a paid article.

See the graphics here:

https://simplywall.st/stocks/ca/healthcare/tsx-ah/aleafia-health-shares/news/aleafia-health-inc-tseah-is-expected-to-breakeven-in-the-near-future/

Aleafia Health Inc. (TSE:AH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aleafia Health Inc. operates as an integrated cannabis health and wellness company. The CA$154m market-cap company posted a loss in its most recent financial year of CA$40m and a latest trailing-twelve-month loss of CA$40m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Aleafia Health will turn a profit, with the big question being “when will the company breakeven?” We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Aleafia Health

According to the 3 industry analysts covering Aleafia Health, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of CA$10m in 2021. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 117% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
TSX:AH Earnings Per Share Growth November 13th 2020

We’re not going to go through company-specific developments for Aleafia Health given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 15% 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:

There are key fundamentals of Aleafia Health which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Aleafia Health, take a look at Aleafia Health’s company page on Simply Wall St. We’ve also put together a list of essential factors you should further examine:

Valuation: What is Aleafia Health worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Aleafia Health is currently mispriced by the market.

Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aleafia Health’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. 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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Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.
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