ICC Labs Inc’s (TSXV:ICC): ICC Labs Inc. produces and sells cannabis in Uruguay. The CA$199.52M market-cap company’s loss lessens since it announced a -US$30.50M bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$8.62M, as it approaches breakeven. As path to profitability is the topic on ICC’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ICC, its year of breakeven and its implied growth rate.

Expectation from analysts is ICC is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of US$18.11M in 2019. ICC is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which ICC must grow year-on-year. It turns out an average annual growth rate of 132.22% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ICC’s growth isn’t the focus of this broad overview, though, keep in mind that typically a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that ICC has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which typically has high debt relative to its equity. This means that ICC has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on ICC, so if you are interested in understanding the company at a deeper level, take a look at ICC’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:

Valuation: What is ICC 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 ICC 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 ICC Labs’s board and the CEO’s back ground. 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.