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Beacon remains bullish on Trulieve

TRUL Stock

Following the company’s fourth quarter results, Beacon Securities analyst Russell Stanley thinks there is still a lot of money to be made on Trulieve Cannabis (Trulieve Cannabis Stock Quote, Chart, News, Analysts, Financials CSE:TRUL).

On February 29, TRUL reported its Q4 and fiscal 2023 results. In the fourth quarter, the company posted EBITDA of $73.0-million on revenue of $287.0-million, a topline that was up 4 per cent from the same period a year prior.

“Last year we successfully executed on our plan to bolster our business resilience with a focus on cash generation and preservation while making investments to support future growth,” said CEO Kim Rivers. “Fourth quarter momentum was underpinned by improved consumer trends. We entered 2024 in a position of significant strength just as the outlook for industry growth and reform brightened. With strong cash generation and a clearly defined strategy, Trulieve is best positioned for the coming wave of meaningful growth catalysts.”

Stanley summarized the quarterly results.

“TRUL reported Q4 revenue/adjusted EBITDA of $287M/$88M, beating our street-low forecast of $259M/$64M, consensus at $268M/$72M and the street high estimates at $272M/$78M. We reduced our estimates in early January based on volume sales data for Florida, so the actual results are particularly impressive,” he noted. “Revenue was well above our forecast, and up 4% q/q v. management’s guide to a low single-digit q/q decline from $275M in Q3. Management called out consumer strength and holiday traffic as drivers. Relative to Q3 averages, December traffic was up 100k, units sold were 4% higher, and basket sizes were up 5%. Gross and adjusted EBITDA margins beat our forecast by 256-bps and 569-bps, respectively. TRUL also produced $131M in operating cash flow, or $32M excluding the impact of the company’s new tax strategy v. our forecast of $33M on a fully-280E-taxed basis, and consensus at $36M.”

In a research update to clients March 1, Stanley maintained his “Buy” rating and one-year price target of $23.00 on TRUL, implying a return of 67 per cent at the time of publication.

The analyst thinks TRUL will post Adjusted EBITDA of $323-million on revenue of $1.18-billion in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $343.0-million on a topline of $1.24-billion the following year.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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