Planet 13 Holdings Inc. (CSE:PLTH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Planet 13 Holdings Inc., a cannabis company, cultivates, produces, distributes, and markets cannabis and cannabis-infused and related products for medical and retail cannabis markets in Nevada, the United States. The CA$1.3b market-cap company’s loss lessened since it announced a US$7.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$6.1m, as it approaches breakeven. Many investors are wondering about the rate at which Planet 13 Holdings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Planet 13 Holdings is bordering on breakeven, according to the 3 Canadian Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$13m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 124% year-on-year, on average, 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 Planet 13 Holdings’ growth isn’t the focus of this broad overview, however, take into account that generally a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means, large upcoming growth rates are not