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Highlights
- Ascend Wellness Holdings nearing breakeven
- Expected positive profits by 2026
- High growth rate required to meet forecasts
Ascend Wellness Holdings, Inc. (TSX:AAWH.U), a company operating in the cannabis sector, is on the radar as it approaches a significant milestone. The firm engages in the cultivation, manufacture, and distribution of cannabis consumer packaged goods across the United States. With a market cap of approximately US$88 million, the company has been navigating financial challenges, posting a loss of US$48 million in its most recent fiscal year and a trailing twelve-month loss of US$88 million.
Investors are keen to understand when Ascend Wellness Holdings might achieve profitability, as many are eyeing the company's growth trajectory. According to analysts covering the Canadian Personal Products space, the consensus is that Ascend Wellness Holdings is close to reaching its breakeven point. Analysts speculate that the company could mark its last significant loss in 2025 and anticipate it might generate a positive return of US$19 million in 2026, suggesting it could break even slightly more than a year from now.
In order to achieve these projections, the company is believed to require an annual growth rate of 74%, based on best-fit models, indicating a robust confidence from analysts. However, if this growth rate is deemed too ambitious, shareholders might expect Ascend Wellness Holdings to turn profitable later than projected.
Though the company's debt levels are a potential concern, with a debt-to-equity ratio exceeding 2x, typically more than double the preferred maximum, the focus remains on its growth potential rather than its current debt load. It's important for potential investors to consider this aspect as it could influence investment risk.
