Yahoo Finance Cano Health, Inc.'s (NYSE:CANO) Profit Outlook
With the business potentially at an important milestone, we thought we'd take a closer look at Cano Health, Inc.'s (NYSE:CANO) future prospects. Cano Health, Inc. provides primary care medical services to its members in the United States and Puerto Rico. The US$2.6b market-cap company’s loss lessened since it announced a US$18m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$1.2m, as it approaches breakeven. As path to profitability is the topic on Cano Health's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Cano Health
Consensus from 8 of the American Healthcare analysts is that Cano Health is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$19m in 2024. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 110% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Cano Health's growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Cano Health is its debt-to-equity ratio of 110%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Cano Health, so if you are interested in understanding the company at a deeper level, take a look at Cano Health's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:
Valuation: What is Cano Health 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 Cano Health 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 Cano Health’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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