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We feel now is a pretty good time to analyse Curaleaf Holdings, Inc.'s (TSE:CURA) business as it appears the company may be on the cusp of a considerable accomplishment. Curaleaf Holdings, Inc. produces and distributes cannabis products in the United States and internationally. On 31 December 2024, the CA$847m market-cap company posted a loss of US$232m for its most recent financial year. The most pressing concern for investors is Curaleaf Holdings' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 10 of the Canadian Pharmaceuticals analysts is that Curaleaf Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$70m in 2027. The company is therefore projected to breakeven around 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 59%, 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 Curaleaf Holdings' upcoming projects, though, bear in mind that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
See our latest analysis for Curaleaf Holdings
One thing we would like to bring into light with Curaleaf Holdings is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Curaleaf Holdings' case is 57%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Curaleaf Holdings, so if you are interested in understanding the company at a deeper level, take a look at Curaleaf Holdings' company page on Simply Wall St. We've also compiled a list of important factors you should further research:
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Valuation: What is Curaleaf Holdings 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 Curaleaf Holdings 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 Curaleaf Holdings’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.
