Curaleaf Cannabis Stock
Curaleaf Holdings, Inc. (CURLF: OTC) engages in operating licensed, vertically integrated cannabis businesses that cultivate, process, and dispense cannabis and cannabis-derived products. Is Curaleaf cannabis stock a strong buy?
Curaleaf Cannabis Fundamental Analysis
Profile:
HQ: Wakefield, MA USA
Incorporated: 2010
Facilities: 23 states
Symbol: CURLF (OTC), CURA (CN)
Focus: Strong
Curaleaf operates and owns 22 cultivation sites, 93 dispensaries, and 30 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey, and New York. Curaleaf leverages its extensive research and development capabilities to distribute cannabis products in multiple formats. They are focused on patient education, physician engagement, and community outreach to build a national retail brand.
Size:
Market Cap: US $3.87 bil
Enterprise Value: US $4.12 bil
Markets: Strong
Primary: 23 states in the USA
Secondary: Canada
Subsidiaries:
Majority: PalliaTech MD Processing, PalliaTech AZ, Curaleaf Midtown, Spark Dispensary
Minority: Groen Investment Group
Operations: Strong
Cultivation:
With the Grassroots acquisition, they currently own and operate over 1.6 million sq ft of cultivation space.
Distribution:
Direct sales: Yes.
Store networks: Current footprint allows for 96 stores operational by 2020 YE. Curaleaf’s primary method of sales currently occurs in its brick-and-mortar dispensaries across the U.S. However, the Company also offers home delivery services across the State of Florida, in compliance with all state regulations. Also in Florida, the Company offers drive-thru service at one of its dispensaries. In multiple States, the Company offers customers the option to order online to pick-up in store. Curaleaf aims to expand its e-commerce operations and delivery operations, where permitted, to offer convenient access for its customers and meet the demands of an evolving retail landscape.
Vertically integrated: Yes.
Horizontally diversified: Yes, they are entering hemp and cannabis-based medicine business arms.
Financials: Strong
Revenue (TTM): $351 mil
Outstanding shares (diluted): 439.9mil
EPS: ($0.10)
Management: Neutral
CEO: Joseph Lusardi
COO: Neil Davidson
CFO: Michael J. Carlotti
Branding: Strong
Curaleaf has become the most accessible national cannabis brand with the largest operational branded dispensary footprint in the country and the recent launch of our CBD line under Curaleaf Hemp. Select Cannabis is their high-end brand with UKU also under management. They now have access to 2/3 of the US population with their store networks and brands.
Valuation: Neutral
Current share price: US $6.86
Price to Sales: 10.10 (Biopharma industry Avg. = 7.5)
52 week low/high: US $2.54to $9.70
Price to Book: 5.63
EV/Revenue: 11.74
Financings: Strong(er)
Curaleaf raised approximately C$520 million (US$400 million) in an oversubscribed private placement offering in 2018. Today they have around $123 mil in cash and around $285 mil in debt.
Curaleaf Technical Analysis
Should I Buy Curaleaf Cannabis Stock?
Using concepts of support and resistance, the MACD, and the stochastic to predict when to buy Curaleaf. Is it too soon to buy Curaleaf?
Remember sound cannabis stock trading strategies include both Fundamental Analysis and Technical Analysis.
Bottom Line: Is Curaleaf Cannabis Stock a Buy?
Recommendation: Strong
Curaleaf Holdings operates an integrated network of medical and wellness cannabis facilities throughout the United States. Curaleaf cultivates, processes, markets, and dispenses marijuana products in a range of forms, including flower, pre-rolls, and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles. Multiple product formats provide an array of administration options, including inhalation, ingestion, sublingual, and topical.
Curaleaf is one of a very large group of multi-state operators to successfully obtain cultivation licenses in more than one of the modern, limited license, merit-based application state programs.
Curaleaf also provides non-cannabis management and consultative services to licensed cannabis operators, to assist with cultivation, extraction, production, and retailing. Founded in 2010, Curaleaf currently operates a network of 93 dispensaries, 22 cultivation sites, and 30 processing sites in 23 states.
Curaleaf Holdings was the largest marijuana initial public offering (IPO) ever, with the company temporarily boasting a lofty valuation of more than $4 billion, after its debut in late October 2018. Today revenue has increased to $117.5 million in Q2 2020 alone.
Curaleaf is currently improving its finances as net income is on a downward slope. Gross profits increased by 180% versus Q2 2019 to $43 mil.
Will its stock price improve in the long term? We think so. The low price of 6.86 is pretty fair considering revenue projections for 2021.
There’s a bull case, and it’s persuasive. A strong capital position with plenty of cash on hand mid-2020, supported by a prudent capital allocation strategy is focused on strategic acquisitions and rapid store expansion. Curaleaf should start to see an improved bottom line, as it generates synergies throughout the marijuana supply chain. The company currently covers 2/3 of the U.S. population!
For these reasons, we think Curaleaf, at or near its current price of $6.86 a share, is a very good investment opportunity.