We’ve seen plenty of excitement with MSO cannabis stocks recently and Jushi Holdings is one such MSO that shows plenty of promise. The company aims to grow by acquiring distressed assets, opportunistic acquisitions, and competitive applications. It is a vertically integrated player that started off focussing on select markets, building a brand name for itself there, and then moving on to the next state. Jushi now has 16 stores operating across six states and it expects to open 10-12 stores this year. This approach has worked quite well for Jushi and that was evident in its third-quarter results for 2020, which ended September 30, 2020. In fact, Jushi stock has more than tripled since the Q3 announcement – but is Jushi Holdings stock a Strong Buy before Q4 results?
Sequential Improvement for this Cannabis Stock
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Jushi is one of the fastest growing cannabis stocks. The company is set to report on Q4 results on April 29th, 2021. In the previous Q3, Jushi reported a total revenue increase by 67% on a sequential basis to stand at $24.9 million, which was a stark increase from the $14.9 million that was achieved in the second quarter. This increase was mainly driven by an overall strong revenue growth that the company saw in its BEYOND/HELLO stores of Pennsylvania and Illinois. While the company saw a gross profit of $12.3 million which was an increase of 64%, it also booked a net loss of $30 million in the quarter.
The most encouraging fact about Jushi was that its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) came in at $1.9 million, which was an overall improvement compared to an adjusted EBITDA loss of $1.9 million in Q2 of 2020.
With this cannabis stock, investors benefit from a high-growth business model that is much less expensive than other cannabis stocks in the space. But does this make Jushi Holdings a strong buy before Q4?
What’s Next for Jushi?
On October 31, 2020, Jushi had around $73 million in cash as well as short-term investments. The company is fully funded for its built-out current portfolio and has excess liquidity so as to pursue certain opportunistic acquisitions.
In fact, the company is looking to expand its cannabis brand across several states, under the following brand names – Nira+Medicinals, Sèche, Tasteology, The Bank, and The Lab.
While Nira+Medicinals will look to develop high-quality THC and CBD-rich products, Sèche aims to redefine the usual perception of cannabis, by creating cannabis-based popcorn and shakes. Tasteology will look to offer premium quality cannabis infused chewables and gummies, The Bank is out creating superior quality plant genetics and The Lab will look to produce high quality vape products and concentrates.
On April 1, 2021, Jushi announced that its wholly-owned subsidiary, Pennsylvania Medical Solutions has entered into an amendment of its existing lease with Innovative Industrial Properties (IIPR), making available an additional $30 million in funding for the first phase of property development of the Facility.
Notably, the release states: “The funding will be used to complete the buildout of the existing 89,000 sq. ft. building and an approximately 40,000 sq. ft. expansion of the Facility for a total of 130,000 sq. ft. The first phase of the expansion, with an estimated budget of approximately $40 million, is expected to add approximately 26,000 sq. ft. of canopy for a total of 45,000 sq. ft. and is expected to be completed by the fourth quarter of 2021.”
Bottom Line: Is Jushi Holdings Stock a Strong Buy Before Q4?
Jushi’s updated its guidance for Q4 2020 in January this year. It expects Q4 2020 revenue of between $32 million and $33 million, up from $28 to $30 million, and maintains adjusted EBITDA guidance between $2.5 million and $3 million. Jushi continues to maintain its previously announced 2021 revenue guidance of $205 million to $255 million and 2021 adjusted EBITDA guidance of approximately $40 to $50 million. When you take into account that its revenue for 2019 was just $80.4 million, you get an idea of how far Jushi has come.
The stock closed April 1 at $6.48. Analysts have given it a target of $9.76. That’s an upside of over 50% from its April 1 closing price.
When you take the guidance for Q4 2020 into consideration, Cannin.com believes Jushi Holdings to be a strong buy and a valuable addition to your cannabis stock portfolio, prior to the data release of the fourth quarter.
Is Jushi Holdings Stock a Strong Buy Before Q4 Results?
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