ECS Botanics Holdings Ltd (ASX: ECS) Perhaps a major achievement in his business is approaching, so we would like to shed some light on the business. ECS Botanics Holdings Ltd, a hemp-based food and food company, grows and processes industrial hemp in Australia. The A $ 39 million market-capitalization company reported a final loss of A $ 4.3 million on June 30, 2021 for its latest result for the year. The most pressing concern for investors is the path to profitability of ECS Botanics Holdings – when will it break even? Below, we’ll provide a high-level summary of industry analyst expectations for the company.
See our latest review for ECS Botanics Holdings
ECS Botanics Holdings is close to equilibrium, according to some analysts at Australian Pharmaceuticals. They expect the company to make a terminal loss in 2023, before making a profit of AU $ 3.2 million in 2024. Therefore, the company is expected to break even in about 3 years. How fast will the company have to grow from one year to the next to reach equilibrium on that date? Using a line of best fit, we calculated an average annual growth rate of 104%, which is pretty optimistic! If the business grows at a slower pace, it will become profitable later than expected.
Since this is a high-level overview, we will not go into details of upcoming projects for ECS Botanics Holdings. However, keep in mind that in general, a pharmaceutical company has irregular cash flows which depend on the drug and the stage of development of the product. Business is on the move. Thus, a high growth rate is not unusual, especially when a company is in the period of investment.
One thing we would like to point out is that the company has managed its capital prudently, with debt representing 0.008% of equity. This means that it has primarily funded its operations from equity and its low debt reduces the risk of investing in the loss-making company.
There are some fundamentals of ECS Botanics Holdings that are not covered in this article, but we must again stress that this is only a basic overview. For a more complete overview of ECS Botanics Holdings, see the ECS Botanics Holdings company page on Simply Wall St. We have also put together a list of relevant factors you should consider further:
- Historical review: How has ECS Botanics Holdings performed in the past? Go deeper into the background analysis and take a look at the free visual representations of our analysis for clarity.
- Management team: An experienced management team at the helm increases our confidence in the company – look at who sits on the board of directors of ECS Botanics Holdings and the CEO’s background.
- Other high performing stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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