Curaleaf: Strong Buy for this Cannabis Stock?
The US-based cannabis company, Curaleaf Holdings Inc cannabis stock (CNSX:CURA) gained a meager 1% on Friday, June 5, 2020, to close at CA$ 7.83. In our opinion, hemp stocks and medical marijuana stocks could soon see a surge of investors because of the sector’s untapped potential. A publication by GlobeNewswire cited a report by Data Bridge Market Research, which claimed that “Global Legal Marijuana Market is expected to reach USD 90.83 Billion at a CAGR of 20.0% Forecast by 2027”. Some of these statistics could be a motivating factor for cannabis and hemp stocks like Curaleaf holdings.
Curaleaf Q1 2020 earnings highlights
On May 18, Curaleaf announced its earnings release for the quarter ending March 31, 2020. In the first three months of 2020, the Total Revenue gained 28% against Q4 2019 and 174% on a year over year basis. Even the gross margin for the present quarter of 43% was higher than the 2019 figures for the same quarter of 38%. One of the main factors for the increased revenue numbers is Curaleaf’s strategic market penetration methodology. Curaleaf has 57 dispensaries spread across 17 states, with 15 cannabis cultivation facilities and 24 sites for cannabis processing. Many of these locations are in or near densely populated areas.
In Q1 2020, Curaleaf posted an Operating income of $4.99 million but a net loss of $15 million. One of the major contributors to this significant drop is the interest expenses in the quarter. The interest expenses increased 2.5 times when compared to the first quarter of 2019. However, the adjusted EBITDA for Q1 2020 is 44% higher than the last quarter of 2019. The Earnings per share for the current quarter was CA$ (0.03)
Analysts raise Curaleaf price targets
William Kirk, an analyst from MKM Partners revised the price target for Curaleaf to CA$ 8, according to a publication in Investing.com. Kirk revised the hemp stock’s price target from CA$6.5 on May 18, 2020, as per another publication on Investing.com. The analyst maintains a “Hold” recommendation for this cannabis stock. Currently, the MKM analyst estimates earnings per share of $ (0.03) for this cannabis stock in the upcoming quarter of 2020.
On the other hand, CNN business posted a consensus of 11 analysts who estimate a price target between CA$5.93 to CA$15.85 with a median of CA$8.65. Among a consensus of 12 analysts, 9 consider this cannabis stock as a “Buy”, 2 analysts suggest a “Hold” rating and one analyst suggesting that the stock will outperform.
While it seems like there’s no consistent consensus among many analysts, we believe Curaleaf is among the top marijuana stocks in the US and certainly one to watch this year.
Source:
https://ir.curaleaf.com/press-releases
Curaleaf: Strong Buy for this Cannabis Stock?
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