We feel now is a pretty good time to analyse Neighbourly Pharmacy Inc.'s (TSE:NBLY) business as it appears the company may be on the cusp of a considerable accomplishment. Neighbourly Pharmacy Inc. owns and operates a chain of retail pharmacies in Canada. The CA$1.0b market-cap company posted a loss in its most recent financial year of CA$73m and a latest trailing-twelve-month loss of CA$1.9m shrinking the gap between loss and breakeven. The most pressing concern for investors is Neighbourly Pharmacy's 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.
See our latest analysis for Neighbourly Pharmacy
Consensus from 8 of the Canadian Consumer Retailing analysts is that Neighbourly Pharmacy is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of CA$8.6m in 2023. The company is therefore projected to breakeven around a year 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 93%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Neighbourly Pharmacy's growth isn’t the focus of this broad overview, though, take into account that by and large 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 38% 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.
Next Steps:
There are too many aspects of Neighbourly Pharmacy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Neighbourly Pharmacy's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
-
Valuation: What is Neighbourly Pharmacy 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 Neighbourly Pharmacy 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 Neighbourly Pharmacy’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.