CannaOne Technologies Inc.'s (CNSX:CNNA): CannaOne Technologies Inc. develops and markets various digital tools to service various segments for the cannabis industry in Canada. With the latest financial year loss of -CA$437.5k and a trailing-twelve month of -CA$1.1m, the CA$8.6m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is CNNA’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for CNNA, its year of breakeven and its implied growth rate.
CNNA is bordering on breakeven, according to Software analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$1.6m in 2022. CNNA is therefore projected to breakeven around 3 years from now. How fast will CNNA have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 61% 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.
Underlying developments driving CNNA’s growth isn’t the focus of this broad overview, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. CNNA currently has a debt-to-equity ratio of 176%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and CNNA has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
There are too many aspects of CNNA to cover in one brief article, but the key fundamentals for the company can all be found in one place – CNNA’s company page on Simply Wall St. I’ve also put together a list of key factors you should look at:
- Valuation: What is CNNA 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 CNNA 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 CannaOne Technologies’s board and the CEO’s back ground.
- 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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