Greenlane Holdings (GNLN) distributes and supplies vape products and accessories for smoke shops and dispensaries. Greenlane recently completed their merger with one of their largest competitors. But is GNLN a strong buy?
The firm offers packaging, rolling papers, grinders, glass products, and smoking accessories. The company was founded in 2005 and is headquartered in Boca Raton, FL. Keep reading to see if GNLN is a strong buy.
What is GNLN?
Based on the fundamentals, GNLN stock seems strong for a number of reasons. They are the partner of choice for the largest vape companies in the nation, they distribute to over 11,000 retail locations, they have their own brand of child proof packaging (Pollen Gear), and they are starting to diversify their offerings with pre-rolled cones now offered.
More good news is their sales numbers for Q2: $23.4 million. With gross profit of $6.7 million they are doing well during a tough year. For comparison, Kush bottles, also a packaging distribution company, is not profitable yet. Their vapor.com website saw a 74% increase in sales, also during Q2 2020.
Bottom Line: Is GNLN a Strong Buy?
Will GNLN stock price improve in the long term? Likely.
They continue to acquire and merge with companies (see Davinci) and that aggressive tone is a long term strategy. The recent KushCo merger hasn’t paid off yet but they can brag about improving expenses by dropping synergies across the two companies. This is needed as operating cash flow is very negative.
Q3 2021 financial results were promising at $41 million in revenue and they still own over 200 patents. The stock price statistics show a price to sales ratio of 0.18, which is very competitive, and EV/Revenue at 0.96 (less than 7 is very strong). If you’re looking for a short term winner, this is not it. They likely have some trouble yet ahead. But if you are looking for a LONG term buy and hold, this one could be for you. At such low prices currently, it is an attractive entry.
GNLN Recommendation: Strong (Long Term), Weak (Short Term)
Is GNLN a Strong Buy?
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