Auxly Cannabis Group Inc. CBWTF XLY reported its financial results on Monday for the three and six months ended June 30, 2022.
The company showed "better-than-expected sales trends and margin improvement," Cantor Fitzgerald's analyst Pablo Zuanic said in his recent note.
The Analyst
Zuanic retained the Neutral rating on the company's stock and a 12-month price target of $0.08.
The Thesis
The analyst expressed concerns about the net debt of $193 million that the company reported, calling it "the highest in our coverage of Canadian LPs."
The debt includes $106 million in convertible debt recently extended to Sep 2024, with a price of $0.81, held by Imperial Brands [IMB.LON/NC]).
Other highlights from Auxly's Q2 earnings report - that Zuanic highlighted - include 21% quarter-over-quarter growth in net sales, being ahead of the 13% decline projected by the Hifyre scanner data, as well as adjusted gross margins improvement of 200bps quarter-over-quarter to 25%.
Adjusted EBITDA for the period was negative $4 million, representing an improvement decrease from the same period of 2021.
Hugo Alves, the company's CEO, said their key objective is adjusted EBITDA profitability in 2022.
"We will continue to focus on cost control and margin enhancement through a continued process of improvements and investments in automation to further support" the goal's achievement, Alves said.
CBWTF Price Action
Auxly's shares traded 11.08% lower at $0.059 per share at the market close on Monday.
Benzinga Cannabis Capital Conference
Come and meet Pablo Zuanic and other extraordinary cannabis visionaries at the Benzinga Cannabis Capital Conference, which returns this fall in Chicago and stay at the historic Palmer House Hotel. Don't miss out on a chance to hear about future market forecasts and worldly advice on investing and finance from those embedded in the cannabis industry.
Book your tickets HERE, and your room HERE.
Photo: Courtesy of Pixabay
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!