Jushi Holdings JUSHF Stock is one of my top picks and can be found on the Best Marijuana Stocks to Buy Now. Jushi Holdings Stock JUSHF is a significantly undervalued marijuana stock. Currently, Jushi has some 21 dispensaries in 7 states and is fully vertical in 3 of those states. There will be more growth in revenue from both organic growth and new revenue generated out of new dispensaries.
Management has stepped back from current guidance but, they also issued guidance for next year that will double revenue. Also, management narrowed the range for guidance that they believe Jushi Holdings will achieve over the next two quarters. Given the future guidance, I wanted to break down how the company can achieve the metrics they are hoping to hit as well as calculate the potential stock price. In the meantime, I’m not so certain about how Jushi Management can hit its goal of 15% EBTIDA for this year considering that there are only two quarters left.
But, Jushi also gave us forward guidance where they are set to earn a whopping 30% EBITDA profit on revenue. That is double where they are now with EBITDA/Revenue percent. This forward guidance gives a solid footing to determine what will happen with JUSHF stock.
Jushi Holdings JUSHF Stock Comparisons
Jushi Holdings JUSHF stock is starting to inch up on the metrics in the Complete List of Top 100 Cannabis Companies. Once Jushi hits its stride with the new dispensaries and new acquisitions and expansion projects in the works.
In the meantime, this is how Jushi stacks up right now versus other companies:
- #16 Market Cap: $795M
- #37 Revenue Growth Rate: 14.4%
- #13 Revenue Per Share: $0.31
- #45 Gross Margins: 45.9%
- #27 Operating Efficiencies: 52.2%
- #43 EBITDA/Revenue: -3.1%
- #49 Cash/Debt Ratio: 30.3%
Jushi Holdings JUSHF stock is pushing upwards with its metrics. Gross margins are expected to increase with the increased revenues pushing through the system. This will create additional marginal profits which trickle down to net earnings.
Jushi Holdings Financial Data
Jushi Holdings continues to print upward revenue and improving metrics. You can read the latest MD&A where they outline their future outlook.
Revenue
My previous revenue projection for Jushi was $52.2M. They printed $47.7M. I was close but, they did a slight downward narrowing of this year’s revenues. Here, however, I projected out the entire year’s revenue for next year of some $400M. The actual range they gave us was between $375M & $425M:
As you can see, the revenue picture looks solid for the next several quarters. I used the middle ground of the range of $400M and gave it a progressive increase. These increases are going to come from new acquisitions, new projects, as well as organic growth with existing resources.
Gross margins
Jushi Holdings just printed 45.9% with Gross Margins. But, I projected out how Jushi gets to 30% EBITDA/Revenue over the next 6 quarters. The only way that happens is with increasing gross margins that would likely look like this:
I’m not certain how the math happens with getting EBITDA hitting the 15% mark over the next two quarters for this year. I’ll let Jushi sort that out and let us know over the rest of this year. But, in order to get to 30% EBITDA with revenue, gross margins have to go upwards and I think this is a good representation of how that might look.
Keep in mind that if you are operating a dispensary, the rent and electricity are likely already paid with revenue at, say $1M a year. But, if you sell more out of that store, say $2M, then margins improve because the rent stays the same. But, it is being paid out of increasingly higher revenue, and this is what we will be seeing with Jushi.
Jushi Holdings is moving from what is about $220M to $400M in just 1 year’s time. Margins will improve.
Operating Efficiencies
Current operating efficiencies are a bright spot for Jushi Holdings:
Again, this is a projection for next year. And, just as increasing revenue will affect gross margins with organic growth, containing operating costs will mean a nice slide lower here. Jushi, in its last conference call, stated that they were operating costs that increased due to the addition of key personnel. Of course, as new stores open and new marketing starts to draw in consumers, this will increase costs simultaneously.
So, while we see increases in total operating costs, my thinking is that the rate of growth will be far outpaced by the rate of growth of revenue.
EBITDA Profits & Net Earnings
Somehow, the last two quarters need to amount to $33M in EBTIDA profits in order to achieve the goal of 15% EBITDA/Revenue rate. Revenue has already printed at $90M for the first two quarters off of what is likely to be $220M. that means out of $130M, Jushi needs to print 25% in order to hit the 15% EBITDA/Revenue rate for the year:
Yeah. I don’t see it either. But, I’m looking beyond this year, and maybe by doing that shows how this is possible. After all, Jushi is now shooting for 30% rate, so the 25% is not too far of a stretch if you work backward. But, they are currently negative and have not really printed much close to this yet.
Obviously, I did not project EBTIDA going forward as I did with gross margins and operating costs.
Net Earnings
This quarter, net earnings were positive for Jushi for the quarter and this is what we are working towards:
I expect that the added revenue will continue to add in more marginal profits that trickle down to net profits.
Earnings Per Share
Despite getting net earnings positive, EPS was negative.
How does that happen? That is actually a question I got from a subscriber/follower. Great question. As it turns out, Jushi needed to balance the books over some warrants. I would have actually thought that would show up in continuing costs. But, that is not the case here. Nonetheless, the core business was profitable, and going forward, allowing for some costs to show up here and there, this will start printing positive very soon.
Jushi Holdings JUSHF Stock Chart
Mostly, the cannabis stocks have been moving lower and lower and are screaming buys for a value investor. Still, it is frustrating: Just trust the process.
JUSHF Stock Chart
Here is a look at JUSHF Stock.
My outlook for JUSHF stock is that it goes up. But, as value investors in cannabis stocks, we are in the minority. However, I really feel we are going to be well rewarded. Patience will be the victory call.
MSOS ETF Chart
MSOS ETF has been selling off; these are significantly undervalued marijuana stocks:
Despite there being some excellent news out of some of the bigger names in cannabis, MSOS continues to trickle lower and lower. It is a screaming buy if you look at it from a value investment perspective and someone getting in will be well-rewarded over the long term.
Jushi Holdings JUSHF Stock Projection
I wanted to break down where JUSHF stock is so that we could look at the future stock projection. Here are the future numbers with the projections I have for gross margins and operating costs and how they trickle through to profits:
- $400M Revenue
- 60% Gross Margins
- 35% Operating Costs
- 10% Continuing Costs
- $60M Net Earnings
Keep one thing in mind: Future earnings are being bought today. But, in the case of Jushi Holdings JUSHF Stock, you are not buying 100% of the future earnings. You are buying what they could have earned and what they then did to turn that into even more earnings in the future with acquisitions and expansion.
Is Jushi Holding JUSHF Stock A Good Buy?
Is Jushi Holdings a good investment? Here is what I am looking at for Jushi Holdings JUSHF. First, they are on a strong revenue run rate for the next six quarters. Jushi is increasing revenues at a pace of about 15% per quarter. There are more stores that will be opened in the very near future. Plus, they are working on other projects so, there is likely to be a consistent amount of growth.
CapEx (Capital Expenditures) will be continuous. And, in the latest earnings call, Jushi management talked about how they were reworking their capital position to enable more flexibility. I believe they are about to be doing something and this is why they may be focusing on capital.
Given these metrics:
- Shares Outstanding: 795M
- $60M Net Earnings
- $0.0755 EPS
- 100x Future Earnings: $7.55
- $4.75 JUSHF
Easily, I could see JUSHF stock doubling in the very near future. But, this is a valuation based upon how the broader market is being valued right now and then comparing that valuation model to cannabis. This is not the case, however. as we all know.
An Undervalued Marijuana Stock
Jushi Holdings JUSHF stock is an undervalued marijuana stock. Period. They will continue to grow revenues and profits and give a shareholder a nice yield. Plus, the addition of new dispensaries and production capacity is merely going to add to the growth.
Jushi Holdings is in 7 states with three fully vertical. They have 21 dispensaries. These numbers are going to continue to expand. And, so will the stock price of Jushi Holdings.
I am looking to see this stock move much higher in the next several months.
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