Traffic numbers are in for the month of May for Nevada cannabis operation Planet 13 (Planet 13 Stock Quote, Chart CSE:PLTH) and they’re nothing short of outstanding, says Doug Cooper, analyst for Beacon Securities, who in a Wednesday report to clients reiterated his “Buy” recommendation and 12-month target of C$7.25, representing a projected return of 172 per cent at the time of publication.
Planet 13 said its pot SuperStore averaged 2,095 daily paying customers in May, up seven per cent from April and up 50 per cent from its November opening. The average ticket price was $90.63, up 1.1 per cent from April and up 14 per cent from November.
Cooper says that the combined traffic and ticket growth of eight per cent is “unheard of in the retail market.” Further, the analyst points out that in the state of Nevada, P13 has been growing its market share from 6.4 per cent in November to 9.2 per cent in March (and up to 12 per cent in Las Vegas’ Clark County). Cooper says that he can think of “no other company that has such a dominant market share within a rec-legal state.”
The company plans to open a cafe and bistro, which Cooper expects should help convert some of its daily customers (about 3,500 in May) who are not purchasing into buyers.
“P13 has clearly established itself as THE company in Nevada. It is a very attractive state and one in which multi-state operators need to establish themselves. P13 is incredibly undervalued not only on its own merits but also as its key strategic position. Wholesale revenue and lounge remain upsides to our model,” Cooper says.
Cooper is calling for fiscal 2019 revenue and Adjusted EBITDA of $82.1 million and $20.5 million, respectively, and fiscal 2020 revenue and Adjusted EBITDA of $109.5 million and $38.0 million, respectively.