Furthermore, the company's progress over the past year is decent as its gross margin widened slightly while it trimmed production costs as a percentage of revenue, suggesting that it's becoming a bit more efficient despite its major acquisitions.īut the timeline to reaching actual profitability remains unclear, and perhaps quite distant. Management says that the closure will help SNDL to lower its cost of goods sold and its gross margin for cannabis, and it probably will. At a minimum, that means the valuation risk of buying shares of SNDL is very low, and nobody can claim that the stock's price is at a hype-driven premium. Its price-to-book (P/B) ratio is just 0.4, which means that the shares are valued at less than the value of the company's tangible assets. By the third quarter of 2022 alone, it was bringing in CA$230.5 million, so management's estimate is likely on the nose, and if revenue growth has any impact on a stock's price (it often does), Wall Street's supposition isn't crazy.Īside from its acquisition-fueled growth, the stock is also valued extremely inexpensively. For reference, in 2021 its sales totaled only CA$56.1 million. The most recent purchase was the Valens, a vertically integrated marijuana operator, which management claims should push SNDL's annual revenue above $1 billion in Canadian dollars ($724 million). It's easy to see why analysts have such high hopes for SNDL it recently acquired several businesses in Canada that will make its top line boom. Its performance is improving, but it's still a mixed bag
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