Home Cannabis Why Charlotte's Web Stock Rose on Friday

Why Charlotte’s Web Stock Rose on Friday

Charlotte’s Web (CWEB) is a leading hemp-based CBD producer. On November 13, the company reported its third-quarter earnings. Like its peers, Charlotte’s Web’s recent earnings missed analysts’ estimates. However, the company’s stock has been rising since Friday.

CWEB’s stock performance

Charlotte’s Web is currently trading at 14.21 Canadian dollars. The company’s stock value closed at 12.65 Canadian dollars on Thursday. This implies an increase of more than 12% in the company’s stock value in the last two trading days. Its stock fell 7.5% on the day of the third-quarter earnings release.

Charlotte’s Web’s stock value has fallen more than 12% year-to-date, primarily due to its second-quarter and third-quarter results. Notably, the entire cannabis industry has been suffering this year. Almost all its peers’ stock prices show a declining trend year-to-date.

Analysts’ take on CWEB stock

The number of analysts covering Charlotte’s Web stock has increased to nine this month, after remaining at eight analysts for the last three months. This number increased from three at the start of the year.

Analysts are bullish about the company’s stock. Currently, two analysts recommend a “strong buy,” six analysts recommend a “buy,” and one analyst recommends a “hold.” The stock doesn’t have any “strong sell” or “sell” recommendations.

Notably, the consensus target price for Charlotte’s Web stock fell after the company released its third-quarter earnings. The stock’s consensus target price for October stood at 31.95 Canadian dollars. The current target price stands at 24.05 Canadian dollars, implying a decline of 24.7%. The new target price is 68% higher than the current traded price of the company.

Highlights of CWEB’s third-quarter earnings

Charlotte’s Web reported revenue of 33.2 million Canadian dollars for the third quarter, which is 41.5% higher than its Q3 2018 revenue. Year-to-date, the company has reported 94.96 million Canadian dollars in revenue. This implies an almost 50% increase from its 2018 revenue of 63.48 million Canadian dollars. Plus, the company’s revenue guidance for fiscal 2019 currently ranges from 125.64 million Canadian dollars to 138.86 million Canadian dollars.

Charlotte’s Web reported a 38.7% increase in its B2C (business-to-consumer) sales and a 66.4% increase in its B2B (business-to-business) sales compared to Q3 2018. The company’s e-commerce platform reported a year-over-year increase of 68% in customer impressions. Notably, the company expects to add 10,000 new customers every month.

Charlotte’s Web is currently constructing a 137,000-square-foot production facility. The company expects this facility to become fully operational in the fourth quarter of 2020. Currently, Charlotte’s Web has 9,000 retail outlets and plans to add 1,000 more outlets to its chain. The company recently launched several new product lines, including pet products and gummies.

 

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