Yahoo Movies urban-gro, Inc. (NASDAQ:UGRO) Has Found A Path To Profitability
urban-gro, Inc. (NASDAQ:UGRO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. urban-gro, Inc. operates as an engineering design services company that integrates complex environmental equipment systems to create indoor cultivation facilities for the commercial horticulture market the United States, Canada, and Europe. The US$115m market-cap company posted a loss in its most recent financial year of US$5.1m and a latest trailing-twelve-month loss of US$1.4m shrinking the gap between loss and breakeven. The most pressing concern for investors is urban-gro's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for urban-gro
Consensus from 2 of the American Machinery analysts is that urban-gro is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.5m in 2022. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 182% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving urban-gro's growth isn’t the focus of this broad overview, however, 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. urban-gro currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on urban-gro, so if you are interested in understanding the company at a deeper level, take a look at urban-gro's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Historical Track Record: What has urban-gro's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on urban-gro'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.
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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.
