CBD company cbdMD Inc. YCBD reported fourth-quarter unaudited net sales of $9.54 million Wednesday and audited net sales for fiscal year 2019 of $23.7 million.
The company posted unaudited net income for the quarter of $7.6 million and a net loss of the fiscal year of $50.4 million, or $2.82 per share.
The Analyst
Cantor Fitzgerald's Pablo Zuanic reiterated a Neutral rating on cbdMD with a $3.40 price target.
The Investment Thesis
While cbdMD matched its fourth-quarter sales guidance of 20% sequential growth, its profit metrics showed little progress, Zuanic said he in a Thursday note. (See his track record here.)
The company is projecting positive EBITDA by October 2020, earlier than prior guidance for January 2021, the analyst said.
When compared to the peers, cbdMD’s “current and projected growth pace is notable,” Zuanic said.
“Taking the fully diluted share count at 44.7mn, we estimate YCBD trades at 3.5x current sales (market cap $139 = $3.11x44.7mn; net cash of $4.7Mn; sales of $9.5x4) at 1.9x the high end of FY20 sales guidance.”
Cantor Fitzgerald needs more convincing when it comes to cbdMD's positive EBITDA guidance, he said.
“Gross margin in 4Q dropped to 51% from 60% plus in the first nine months. Operating expenses before impairments only dropped to 140% of sales vs. 156% in the Jun qtr; management said this will improve by April), but a clear path to positive EBITDA (by Oct) was not provided.”
The company’s new and ongoing sponsorships and brand awards all raise brand awareness for cbdMD and its pet line Paw CBD. the analyst said.
Price Action
The stock was trading down 6.05% at $2.95 at the time of publication.
Don’t miss out on the top cannabis stories of the day. Click here to sign up for our daily insider newsletter.
Photo courtesy of cbdMD.
© 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!