Shares of Sundial Growers (NASDAQ:SNDL) popped in Thursday’s pre-market trading as investors reacted to the Canadian cannabis producer’s fourth-quarter results. SNDL stock was up 4.5% as of 8:30 am Eastern. Here are five takeaways.
No. 1: While the firm announced a net loss of 64.1 million CAD ($51.4 million), that was an improvement on both a quarter-to-quarter and year-over-year basis. Those comparative respective losses were 71.4 million CAD and 145.9 million CAD.
No. 2: Net cannabis revenue of 13.9 million CAD was up 8% sequentially but down more than 5% YOY. Analysts estimated revenue of 12.1 million CAD.
No. 3: The results showed adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations loss of 5.6 million CAD in Q4. In the preceding Q3, the firm posted a loss of 4.4 million CAD.
No. 4: price per gram equivalent of branded products was 5.05 CAD per gram in 2020, net of provisions, compared to 6.24 CAD per gram in the prior year as a result of industry-wide price compression and a shift to value product. Sundial anticipates continued downward price pressure throughout the industry in the coming year due to continuing competition and relative oversupply.
No. 5: As well, Sundial said it had an unrestricted cash balance of approximately 719 million CAD as of this week. That’s no surprise as the company has been able to raise a boatload of money in equity markets, the market on Feb. 2 for $75 million, which added to an already-impressive war chest of over 600 million CAD.
SNDL Stock Moves Anticipated Results
As a small cannabis player, Sundial has remained unprofitable, which is unsurprising news to investors. However, after flirting with bankruptcy and avoiding delisting recently due to a sharp retail-driven spike in its share price, SNDL stock has a new lease on life.
Since hitting an intra-day low around 92 cents per share on March 5, shares of SNDL stock have steadily climbed higher. In recent days, the company’s share price has breached the $1.50 level and appears to be hurtling toward a two-bagger in less than a couple weeks.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.
