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Farmers Edge Inc. (TSE:FDGE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Farmers Edge Inc. develops digital agriculture solutions in North America, Brazil, Australia, and Eastern Europe. With the latest financial year loss of CA$85m and a trailing-twelve-month loss of CA$73m, the CA$407m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Farmers Edge will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Farmers Edge is bordering on breakeven, according to the 4 Canadian Software analysts. They expect the company to post a final loss in 2022, before turning a profit of CA$18m in 2023. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 109%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Farmers Edge given that this is a high-level summary, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.6% 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.
There are too many aspects of Farmers Edge to cover in one brief article, but the key fundamentals for the company can all be found in one place – Farmers Edge's company page on Simply Wall St. We've also put together a list of key factors you should look at:
Valuation: What is Farmers Edge 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 Farmers Edge 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 Farmers Edge’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.
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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