We feel now is a pretty good time to analyse Plant Health Care plc's (LON:PHC) business as it appears the company may be on the cusp of a considerable accomplishment. Plant Health Care plc, together with its subsidiaries, provides agricultural biological products and technology solutions in the Americas, Mexico, and internationally. On 31 December 2021, the UK£35m market-cap company posted a loss of US$6.3m for its most recent financial year. The most pressing concern for investors is Plant Health Care's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 2 of the British Chemicals analysts is that Plant Health Care is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$6.8m in 2024. So, the company is predicted to breakeven approximately 2 years from today. 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 102% 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.
We're not going to go through company-specific developments for Plant Health Care given that this is a high-level summary, but, 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. The company has managed its capital prudently, with debt making up 1.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Plant Health Care, so if you are interested in understanding the company at a deeper level, take a look at Plant Health Care's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Historical Track Record: What has Plant Health Care'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 Plant Health Care'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.