We Might See A Profit From Burcon NutraScience Corporation (TSE:BU) Soon
We feel now is a pretty good time to analyse Burcon NutraScience Corporation's (TSE:BU) business as it appears the company may be on the cusp of a considerable accomplishment. Burcon NutraScience Corporation, together with its subsidiary, develops plant proteins and ingredients for use in the food and beverage industries in Canada. On 31 March 2021, the CA$401m market-cap company posted a loss of CA$617k for its most recent financial year. Many investors are wondering about the rate at which Burcon NutraScience 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.
Check out our latest analysis for Burcon NutraScience
According to the 2 industry analysts covering Burcon NutraScience, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of CA$1.1m in 2022. Therefore, the company is expected to breakeven roughly 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 68%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Burcon NutraScience given that this is a high-level summary, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Burcon NutraScience has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Burcon NutraScience to cover in one brief article, but the key fundamentals for the company can all be found in one place – Burcon NutraScience's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
Valuation: What is Burcon NutraScience 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 Burcon NutraScience 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 Burcon NutraScience’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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