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Curaleaf: Analysts Are Hopeful ahead of Q3 Release

Curaleaf Holdings (CURLF) is a vertically integrated operator in the US cannabis market. Recently, Curaleaf entered into several acquisition deals. On November 11, Curaleaf stock was trading at 6.7 Canadian dollars, an increase of 3.67% in the month. The company is set to report its third-quarter earnings results on November 19. Since it announced its earnings release date on October 24, the stock has fallen more than 6%.

Curaleaf’s financials and estimates

Curaleaf reported revenue of 64.8 million Canadian dollars in the second quarter, an increase of 38% sequentially. Further, analysts expect its 2019 revenue to be 262.95 million Canadian dollars, up 240% from 2018.

The company reported a net loss of 32.8 million Canadian dollars, a 140% fall from last quarter’s net loss. Analysts expect the company to report a net loss of 30.45 million Canadian dollars, a 17% improvement from last year.

The revenue forecasts for the company imply a compound annual growth rate of 174% for the next three years. Further, analysts expect the company to be profitable from 2020 onward. If Curaleaf achieves this, it will mean remarkable growth.

Analysts’ recommendations and target price

In the last 12 months, the number of analysts covering the stock has grown from two to eight. Of the eight analysts covering the stock, two recommend “strong buys,” five recommend “buys,” and one recommends a “hold.” This marks an improvement from last month, as one analyst has changed from a “sell” to a “buy.”

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Recently, MKM Partners raised the stock’s target price from 5 Canadian dollars to 6 Canadian dollars. MKM further raised its rating from a “sell” to a “hold.” The stock’s consensus target price has been falling for the last four months. It currently stands at 16.16 Canadian dollars. This target price is still 148.59% higher than its current price. Last month, Cowen and Company reduced its target price from 10.5 Canadian dollars to 9.5 Canadian dollars. Prior to that, Cormark Securities and Haywood Securities reduced Curaleaf’s target price by 16.67% and 12.5%, respectively.

Curaleaf stock’s performance

Unlike many of its peers, Curaleaf’s quarterly results have made investors optimistic about its stock. The trend shows an immediate rise in the value of the stock after its earnings releases. As the company is releasing its third-quarter results next week, investors and analysts are hopeful. The stock is up 3.6% this month. After Cowen’s rating change, the stock rose 5% in one day.

The overall trend shows a decline in the stock’s value. Curaleaf has fallen 31.58% in the last year. Almost 57% of this fall happened in the last six months, whereas it’s fallen 25.2% in the last month.

Peer comparison

Curaleaf’s financial estimates and analysts’ recommendations raise expectations in a bullish market. With eight analysts currently covering the stock, its consensus rating stands at 1.9.

Despite many analysts’ downgrading HEXO stock, it’s up 8.83% this month. Currently, 15 analysts cover HEXO (HEXO), and its consensus rating stands at 3.1. In comparison, Aphria (APHA) stock is up 2% this month. Currently, 13 analysts cover the stock, and it has a consensus rating of 2.1.

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