Planet 13 Holdings

Nevada Grown Cannabis

/
Volume | Market Cap | Shares | PEG Ratio | EPS

Fundamentals.

Profile:
HQ: Las Vegas, NV, USA
Founded: 2002
Facilities: Las Vegas, Beatty, NV
Symbol: PLNHF (OTC)

Focus: Neutral
Planet 13 is focused on becoming a vertically integrated cannabis company with cultivation, production, and distribution in Las Vegas. Planet 13’s vision is to be a leading global brand known for the best distribution operations and manufacturing of innovative cannabis products. Planet 13 is currently investing in strategic technologies for the growing demand of high quality and diverse cannabis oils and extracts for the medical use in the U.S.

Size: Neutral
Market Cap: US $260.1 mil
Enterprise value: $249.1 mil
# of employees: 33

Markets: Weak
Primary:  Nevada
Secondary:   California, USA
Subsidiaries: MM Development Company, Inc

Operations: Strong
Cultivation:
Present capacity: 950 kg per year at 15,000 sq. ft. facility in Las Vegas
Future capacity: 14,000 sq. ft. production facility for processing 600 lbs of plant biomass per day in Las Vegas

Distribution:
Direct sales: Planet 13 is operating at one licensed dispensary facility while holding two dispensary licenses
Store networks: Planet 13 Superstore with approximately 16,000 square feet of retail space. Opening a new
stored in Southern California
Supply Agreements: Supply agreement with Shango, 8Fold, Vegas M Stick, Redwood, Matrix NV, Taproot and Select for Concentrates, Cartridges and Tinctures (19,000+ patients)

Integration/Diversification:
Vertically integrated: Yes
Horizontally diversified: No

Financials:  Strong
Outstanding shares (diluted): 96 mil
Revenue last year: $27.44 mil
Revenue rank in cannabis industry: 14th
EPS: ($0.14)

Management: Strong
CEO: Bob Groesbeck
CFO: Dennis Logan

Management has experience of more than 30 years working at well known legal, pharmaceutical, and financial investment companies. Their past experience will significantly help them in  acquiring medical and commercial licenses.

Branding: Neutral
Being world’s largest cannabis store, Planet 13 aims to deliver exceptional customer experiences, focused on interactive entertainment while offering the best cannabis products. The
Planet 13 Superstore brand is quite well known for its close proximity to Las Vegas strip and growing portfolio of cannabis products. A bit of a gimmick, but still nice.

Valuation: Strong
Current share price: US $2.03
Price to Sales: 7.06
52 Week Low/High: $0.87 to $2.70
EV / Revenue: 7.41
Price to Book: 6.4

Financings: Strong
In 2018, Planet 13 issued 2,580,810 common shares which brought in cash proceeds of $2,374,253. They also issued 5,532,940 Class A restricted shares at a price of CAD$0.80 per
share for total equity of $3,409,476.

Risks: Neutral
The risks of investing in any cannabis company are currently high given the newness of the market. The risks of investing in this company are higher given the low national footprint. If anything occurred where they lost there local license in NV, company revenue would cease.

Recommendation: Strong
Planet 13 is focused on becoming a leading global brand known for its distribution, operations, and manufacturing of innovative cannabis products. The company is currently investing in strategic technologies for the growing demand of high quality and diverse cannabis oils and extracts for medical and retail use in the U.S.

Planet 13 signed strategic partnerships with suppliers of concentrates, cartridges, and tinctures to supply high quality cannabis products for its superstore in Las Vegas. Their new highly automated production facility in Las Vegas will use robotics to reduce costs and will be able to process 600 lbs plant biomass per day. We think Planet 13 is in a good position to be a profitable company, as they are in the expansion phase of their retail and production facilities. In 2018, Planet 13 experienced growth of more than 10 percent in terms of average daily customers.

Will its stock price improve in the long term? We think so.

In 2018, Planet 13 revenue rose 136% from $9.0 million (2017) to $21.2 million and gross margin rose to $10.9 million as compared $4.6 million in 2017, an increase of 134%. These figures show strong growth as compared to other Cannabis stocks struggling to maintain growth.

Planet 13 had US $884 k in debt by March 2019 as compared to US $4.25 m a year prior. However, they have US $20.2 m in cash or cash equivalent to cover its debt obligations with net cash of US $19.3 m. Planet 13’s debt to equity ratio for the year 2018 was only 0.02 which means that they are not raising debt to finance their growth which can result in less volatility in earnings as a result of reduced interest expense.

Planet 13 is showing persistent increase in its earnings growth for the last two years so investors should keep an eye on its EPS growth rate if they intend to hold stock for the long term. Planet 13 management holds 61% of company outstanding shares listed which shows their confidence in the long-term outlook of the company.

For these reasons, we think Planet 13, at or near the its current price of $1.86 a share, is very good investment opportunity—however as the price rises this opportunity will eventually disappear.

 

Planet 13 Holdings

PLNHF (OTC)

Recommendation: Strong

READ PLANET 13 HOLDINGS (PLNHF) NEWS

Get the Q2, ’19 Cannin Hemp Report ($99)

Includes the latest market & industry update, 12 technical fundamental analyses, latest regulations by state, new medical research and more!

LEARN MORE

Technical Analysis of Planet 13 Holdings (PLNHF)