When Will Interfor Corporation (TSE:IFP) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at Interfor Corporation's (TSE:IFP) future prospects. Interfor Corporation, together with its subsidiaries, produces and sells wood products in Canada, the United States, Japan, China, Taiwan, and internationally. The CA$946m market-cap company posted a loss in its most recent financial year of CA$344m and a latest trailing-twelve-month loss of CA$383m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Interfor'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.

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Consensus from 6 of the Canadian Forestry analysts is that Interfor is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of CA$69m in 2027. Therefore, the company is expected to breakeven just over a year 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 164% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Interfor's upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for Interfor

One thing we would like to bring into light with Interfor is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Interfor's case is 68%. 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 too many aspects of Interfor to cover in one brief article, but the key fundamentals for the company can all be found in one place – Interfor's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is Interfor 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 Interfor 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 Interfor’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.

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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.