Is Planet 13 Holdings a buy? (August, 2024)

Following the company’s second quarter results, Beacon Securities analyst Doug Cooper remains bullish on Planet 13 Holdings (Planet 13 Holdings Stock Quote, Chart, News, Analysts, Financials CSE:PLTH).

On August 8, PLTH reported its Q2, 2024 results. The company posted Adjusted EBITDA of $3.2-million on revenue of $31.1-million, a topline that was up 20.3% year-over-year.

“Q2 was an exciting period for Planet 13, marked by strong financial performance and execution of our growth initiatives. We closed the transformational acquisition in Florida and opened our completely unique DAZED! consumption lounge. In addition to consolidating results in Florida, we generated strong sequential organic revenue growth, better margins and increased cash flow across our operations,” said co-CEO Larry Scheffler.

The analyst says the company’s balance sheet is in great shape.

“Even after making a transformational acquisition and the situation with El Capitan, PLTH’s balance sheet remains in great shape. It ended the quarter with $29 million in cash against $9.5 million of debt, mostly bank and VTB debt relating to the VidaCann acquisition and which is due early 2025. In addition, PLTH expects ~$6 million in capex over the next 12 months, primarily to open new stores in Florida,” he wrote. “Doing the math, PLTH expects cash outflows of ~$13 million noted above but anticipates offsetting that with ~$4 million from selling its surplus building in Florida and free cash flow of ~$10+ million. As such, we believe PLTH could still have $30 million a year from now.”

In a research update to clients August 9, Cooper maintained his “Buy” rating and price target of $2.00 on PLTH, implying a return of 228% at the time of publication.

The analyst thinks the company will post Adjusted EBITDA of $12.2-million on revenue of $126.3-million in fiscal 2024. He expects those numbers to grow to Adjusted EBITDA of $27.4-million on a topline of $176.5-million the following year.