Like sports fans who support the team left on the scoreboard, investors in the cannabis sector are vigilantly looking for that coveted turnaround for businesses, the breakthrough that will shift the game and change the outcome for the better.
In some ways the income season is viewed in the same way. Unexpected depreciations, which put the elusive profitability threshold out of reach, put pressure on expectations around some growers and the market reacts within hours, causing stock prices to fall. Alternatively, an unanticipated boost in cannabis sales that drives revenues is seen as a critical milestone and that company's stock is rising.
The key question for investors: which companies are the best?
One cannabis name that consistently lists winning numbers is Trulieve Cannabis (OTC :), (CSE :), a Florida-based medical marijuana company. On August 12 Trulieve pushed again and the market reaction was rapid, taking the stock to a record high of $ 26.25.
The integrated cannabis company & # 39; from seed to sale & # 39; revealed better-than-expected results for the second quarter, with sales of $ 120.8 million, a record for the company and an increase of 26% from the previous quarter and an increase of 109% from the same quarter last year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to US $ 60.5 million, Trulieve & # 39; s 10th consecutive quarter posted profit. These consistently positive results make the company somewhat of an outlier in the industry.
And by telegraphing the message that this was not just a momentary rebound, the company adjusted its fiscal outlook for the remainder of the fiscal year, boosting its EBITDA to between $ 205 million and $ 225 million. The previous guideline had brought adjusted EBITDA between $ 140 million and $ 160 million.
In a statement, Trulieve CEO Kim Rivers said:
“Once again, our financial results reflect our exceptional ability to grow our business quarter-on-quarter, through continued organic expansion of our retail footprint, while maintaining industry-leading profitability. We are pleased to deliver a strong financial performance be able to demonstrate in revenue, adjusted EBITDA and free cash flow while running our business to meet the changing behaviors and needs resulting from COVID. "
"Looking ahead, we look forward to the second half of the year and will continue to focus on implementation and expansion."
First, analysts agreed and described the revenue expectations as conservative. Then the market had its say.
Shares of Trulieve added more than 15% to an all-time high of US $ 26.25. The stock has since recovered some of those gains, closing at $ 23.64 yesterday. Over the past year, Trulieve is up just over 157%, an impressive figure in an industry where market capitalizations have wiped out over the same period.
Like sports fans, investors in the cannabis sector are looking for a winner. Trulieve proves that it is an experienced artist.
