Benzinga – by Nicolás Jose Rodriguez, Benzinga Staff Writer.
A recent Beacon Securities report focuses on Curaleaf’s strategic financial management and the potential impacts of legislative changes on its operations. Concurrently, Needham‘s report highlights Trulieve’s operational strengths and projected growth, emphasizing the company’s adeptness in navigating regulatory landscapes and capitalizing on market opportunities.
Curaleaf’s Strategic Gains Amidst Modest Revenue Growth
Curaleaf Holdings Inc.
The adjusted gross margins saw a quarter-over-quarter increase of 117 basis points, indicative of improved asset utilization across their cultivation and manufacturing operations. Despite a slight decrease in vertical mix affecting overall margins, Curaleaf’s operational adjustments led to stronger EBITDA margins than anticipated.
Russell Stanley of Beacon highlighted the company’s adept management of operating cash flows which facilitated a significant debt repurchase post-quarter, enhancing its financial stability. Additionally, Russell considered the potential benefits from the expected rescheduling of cannabis and the implications of the SAFER Banking Act are poised to create a favorable financial landscape for Curaleaf.
Trulieve’s Profitability
Concurrently, Trulieve Cannabis Corp. (OTC: TCNNF) reported a commendable start to 2024, with first-quarter revenues climbing to $297.6 million, outpacing expectations. According to Matt McGinley from Needham, the company achieved the highest gross margin and EBITDA rates observed in over two years, at 58.4% and 35.5% respectively. This improvement is largely attributed to stabilized pricing and cost reductions in their Florida operations.
Trulieve’s fiscal prudence was evident in their management of operating cash flow, which included a notable $96 million relating to 280E tax refunds, underscoring their adept navigation of regulatory landscapes to bolster financial health.
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Projections
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Trulieve’s Operations And Future Prospects
On the other hand, Needham’s Matt McGinley praises Trulieve Cannabis Corp. for its operational excellence, which he believes sets the company up for a successful financial year. He highlights Trulieve’s record-setting gross margins and EBITDA rates at the beginning of 2024, attributing these achievements to the company’s rigorous operational efficiencies and cost management strategies.
Moreover, he points to significant potential for growth in revenue stemming from legislative advancements in key markets like Florida and Pennsylvania, which may transition to adult-use cannabis. This potential market expansion could dramatically increase Trulieve’s revenue base, potentially doubling it in these regions.
Photo: AI-Generated Image.
Latest Ratings for CURLF
| Mar 2022 | Needham | Maintains | Buy | |
| Mar 2022 | Cantor Fitzgerald | Maintains | Overweight | |
| Jan 2022 | Wolfe Research | Initiates Coverage On | Peer Perform |
View the Latest Analyst Ratings
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