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Market Sentiment Around Loss-Making Cano Health, Inc. (NYSE:CANO)

We feel now is a pretty good time to analyse Cano Health, Inc.'s (NYSE:CANO) business as it appears the company may be on the cusp of a considerable accomplishment. Cano Health, Inc. provides primary care medical services to its members in the United States and Puerto Rico. The company’s loss has recently broadened since it announced a US$18m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$58m, moving it further away from breakeven. The most pressing concern for investors is Cano Health'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.

See 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 anticipate the company to incur a final loss in 2024, before generating positive profits of US$106m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Cano Health's upcoming projects, 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.

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One thing we would like to bring into light with Cano Health is its debt-to-equity ratio of 118%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Cano Health which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Cano Health, take a look at Cano Health's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

  1. 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.

  2. 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.

  3. 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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