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We feel now is a pretty good time to analyse SunOpta Inc.'s (NASDAQ:STKL) business as it appears the company may be on the cusp of a considerable accomplishment. SunOpta Inc. engages in manufacture and sale of plant-based and fruit-based food and beverage products in the United States, Canada, and internationally. The US$741m market-cap company announced a latest loss of US$12m on 28 December 2024 for its most recent financial year result. As path to profitability is the topic on SunOpta's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for SunOpta
Consensus from 5 of the American Food analysts is that SunOpta is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$18m in 2025. The company is therefore projected to breakeven around 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 105%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of SunOpta's upcoming projects, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with SunOpta is its debt-to-equity ratio of 133%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on SunOpta, so if you are interested in understanding the company at a deeper level, take a look at SunOpta's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:
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Valuation: What is SunOpta 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 SunOpta is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SunOpta’s board and the CEO’s background.
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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.