I am bullish on Trulieve Hashish (TCNNF) because it enjoys large development potential and momentum, its value goal implies excellent complete return potential, and Wall Road analysts are unanimously bullish on it.
Trulieve Hashish is a medical hashish firm primarily based in Canada and america. It maintains a big presence throughout the U.S., with headquarters in Florida. Trulieve is principally engaged within the cultivation, possession, advertising, and sale of medical hashish, hardly ever exploring leisure merchandise.
With that stated, Trulieve has come beneath regulatory scrutiny due to a current dialog between Halsey Beshears, a former state consultant; and JT Burnette, the husband of Trulieve’s CEO, Kim Rivers. Burnette was discovered responsible of 5 expenses, together with extortion and mendacity to the FBI, in a case unrelated to Trulieve.
Strengths
The hashish trade is rising at a fast tempo, whether or not it’s for leisure use or medical causes, and there may be an untapped market ready to be captured.
TCNNF has only a few shut opponents proper now. At its present development charge, Trulieve is poised for a superb decade. What stands out about Trulieve is its full devotion to Florida, with a complete of 102 shops, which incorporates the acquisition and subsequent rebranding of Harvest Well being shops.
Trulieve does present leisure hashish merchandise in states the place leisure use is authorized. The corporate gives quite a lot of low-THC hashish merchandise, starting from vaporizers and edibles to liquids and capsules. Trulieve at present holds the dominant place within the medical marijuana trade in Florida, working in almost 88 shops. It has a close to 50% market share in Florida.
Latest Outcomes
Trulieve reported a 64% improve in income, year-over-year, as demand continued to extend for hashish merchandise, regardless of pandemic-led restrictions. Its income elevated to $224.1 million, and the corporate had additionally accomplished the $2.1 billion acquisition of rival firm Harvest Well being & Recreation Inc.
Nonetheless, working bills greater than doubled, year-over-year, to $87.7 million.
Valuation Metrics
TCNNF inventory seems attractively priced right here, because it trades beneath its historic averages on an enterprise worth to EBITDA ratio foundation. Its enterprise worth to EBITDA ratio is 7.5x, in comparison with its historic common of 11.12x.
In the meantime, analysts count on income to develop by a whopping 61% in 2022, and EBITDA to develop by 46.6% in 2022.
Wall Road’s Take
In keeping with Wall Road analysts, TCNNF earns a Robust Purchase analyst consensus primarily based on seven Purchase scores, zero Maintain Scores and nil Promote scores up to now three months. Moreover, the average TCNFF price target of $67.40 places the upside potential at 221.86%.
Abstract and Conclusions
TCNNF inventory is bolstered by a really cheap valuation, with its EV/EBITDA ratio sitting within the single digits at the same time as its development momentum and outlook are very spectacular. On prime of that, Wall Road analysts are unanimously bullish on the inventory right here and assign it a mean value goal that signifies the inventory might recognize by nicely over 150% within the subsequent twelve months.
Whereas regulatory dangers stay in an immature trade akin to medical hashish, this inventory seems prefer it has a large margin of security. Due to this fact, buyers would possibly wish to add shares whereas the inventory stays so inexpensively priced.
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Learn full Disclaimer & Disclosure
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
