With the business potentially at an important milestone, we thought we'd take a closer look at Flora Growth Corp.'s (NASDAQ:FLGC) future prospects. Flora Growth Corp., a cannabis company, cultivates, processes, and supplies cannabis products to pharmacies, medical clinics, and cosmetic companies worldwide. The US$90m market-cap company posted a loss in its most recent financial year of US$14m and a latest trailing-twelve-month loss of US$17m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Flora Growth's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Flora Growth is bordering on breakeven, according to the 2 American Personal Products analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.0m in 2022. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 135%, 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 Flora Growth's upcoming projects, but, 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 prudently, with debt making up 0.4% 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 Flora Growth to cover in one brief article, but the key fundamentals for the company can all be found in one place – Flora Growth's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
Historical Track Record: What has Flora Growth'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 Flora Growth'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.