Planet 13 Holdings PLNHF Stock Forecast & Analysis

Planet 13 Holdings PLNHF stock is one of my top picks.  There are a few reasons why I like Planet 13 Holdings including the individual potential of Planet 13 Holdings, and its potential to be acquired.  And, I want to answer the question if Planet 13 PLNHF stock is a good investment.  We are in the very early season of cannabis stocks investments.  And, I expect there will be many changes ahead with individual cannabis stocks being acquired and merged.  For instance, Planet 13 Holdings just finished the process of acquiring Next Green Wave NXGWF stock.

Given the recent acquisition, PLNHF stock is an excellent cannabis stock, another from the list of the best cannabis stocks – my top picks.  Considering this, I wanted to put together the PLNHF stock forecast as well as answer the question: Is Planet 13 Holdings PLNHF stock a good investment.

Planet 13 Holdings PLNHF Stock A Buy with Florida & Illinois

Planet 13 Holdings is based out of Nevada.  They have a grow facility and a massive dispensary in Las Vegas that targets the tourists coming to Las Vegas looking for a party atmosphere.  Also, Planet 13 Holdings opened a dispensary in Orange County, CA which, similar to Las Vegas, targets the tourist business.  Orange County is home to Disney and gets its share of tourism.

Given the dispensary in Orange County, acquiring Next Green Wave made a great deal of sense because this immediately gives Planet 13 Holdings a grow facility as well as a profitable company.  Next Green Wave is also – or, was now that they are being acquired – one of my top picks.  They are a smallish, boutique grow facility that is focused on premium outdoor-grown cannabis and, they are expanding.  Next Green Wave is also profitable.

Now that the new facility will be available to Planet 13 Holdings, they will be able to produce their products in California in a facility that is top-notch.  This adds value to both Next Green Wave as well as Planet 13 Holdings; both will benefit greatly.  This will help Planet 13 Holdings move up in the Cannabis Stocks: Complete List Ranked.

Planet 13 Holdings in Illinois

The next phase of expansion for Planet 13 Holdings is the opening of the Illinois dispensary which, similar to both Las Vegas & Orange County, is a mega-dispensary that targets an experience in the dispensary itself.  Planet 13 Holdings has a provisional license for Illinois and has already announced a partnership for its flagship dispensary in Illinois.

Planet 13 Holdings in Florida

The next stop for Planet 13 Holdings will be its entrance into the biggest medical market in the nation: Florida.  Planet 13 Holdings is looking at Orlando FL to start with other options and they have recently acquired a vertically integrated company in Florida.  The addition of one of the biggest medical-only states will add considerable revenue in the future with this integration.

Planet 13 Holdings Financial Data

For now, Planet 13 Holdings is only in the financial data from the most recent release.  Planet 13 Holdings and Next Green Wave will be closing in the coming months.  After the close, I will be more capable of assessing the future of the combined company.

Planet 13 Holdings Gross Profits

Owed to COVID lockdowns and a few other outlier events (construction along the freeway near the OC dispensary), revenue growth was stunted and shrank QoQ for Planet 13 Holdings in Q4, 2021.  Expectations are for a return to growth with revenue.

After looking at several analyst projections, increases in revenue are low.  Although I used these projections, I believe that Planet 13 Holdings will increase its revenues, organically at its current and future dispensaries, beyond analyst projections.

Also, gross margins are coming in at approximately 52.5%.  With muted revenues, any increases in sales at the dispensaries are going to have marginal profits at higher levels moving forward.  For an astute value investor, this is something to key in on.  Often, these kinds of metrics get lost in analysis.

Planet 13 Holdings Operating Profits

Over the past three quarters, operating costs have increased relative to the increases in revenue growth.  Operating costs should move downward with additional revenue increases once the COVID barriers are lifted and tourism gets back into full swing once again.

But, despite what might occur in the near future with operating efficiencies with a return to organic revenue growth, the S&P 500 tends to print near 17.5% operating efficiencies.  Planet 13 Holdings has some room to go until there is scale achieved to get to these levels.

With more non-organic expansion about to be brought into the fold, this will mean that the newly combined Nevada, California, Illinois, & Florida operations will have the opportunity to cut redundant costs and improve metrics in these areas.

Planet 13 Holdings EBITDA & Net Profits

I am looking for better EBITDA & Net Earnings in the near term.  Keep in mind, Next Green Wave is profitable overall.  And, when Planet 13 Holdings brings this into the fold, this will help to bring profitability to the bottom line.

And, with cost cutting in both operations and production, EBITDA rates may get to competitive levels.

A perfect example would be the future gains expected from Planet 13 Holdings; the core company as it is.  If the $140M projected revenue is achieved, and Planet 13 Holdings hits $50M EBIT (In my projections below), this will push margins to much higher levels.

Planet 13 has maintained fairly static operating expenses.  So, with the revenue gains projected, this will dilute the operating expenses relative to revenue.  Still, there is a ways to go further. And, more economies of scale will improve margins continuously.  This is all without the future additions to the top & bottom line from Next Green Wave (already profitable) and the Florida acquisition.

Planet 13 Holdings Cash On Hand

If you look at the thumbnails below, you will see that Planet 13 Holdings does not have much in the way of debt.  And, they also have sufficient cash on hand – and, access to capital via total equity – where there are not any issues with cash.  Cash is fresh oxygen for a company when there is water around.  Planet 13 Holdings will have access to cash on hand.

Next Green Wave is profitable so, its contribution to Planet 13 Holdings will be positive.  And, gains from the merger of the two companies in cost reductions will mean a better bottom line and more cash.

As for Florida, if that vertically integrated business is also profitable then, the addition will only be more positive in the long run for Planet 13 Holdings.  PLNHF Stock will push higher.

Planet 13 Holdings Total Equity

There will be big, continuous changes to total equity in the coming quarters as Next Green Wave integrates into the fold as well as Florida and new expansions into Illinois for Planet 13 Holdings.  For now, Planet 13 Holdings growth in total equity has been slightly hampered due to COVID and other issues.  And, not being able to capitalize on tourist revenue has also hampered overall performance in other metrics.

I am curious to see how the future increases in assets & liabilities will change the total equity picture.  I am always looking for growth in this area.  As total equity grows, so does the ability to increase revenues and profits.  And, it is preferable to see total equity grow organically, without acquisitions.

Organic growth is proof of concept for cannabis stocks.  If a company is continually growing they are selling more and more product and expanding more and more.  The stall in Planet 13 Holdings is not worrisome, by any means.  But, I would really like to see organic gains.

Planet 13 Holdings PLNHF Stock Forecast

Planet 13 Holdings PLNHF Stock DCF

When I put together the PLNHF stock forecast, I only considered the current business and kept out the future expansion of new businesses.  Given this, with a modest growth rate of only approximately 20% with what would be the two dispensaries in Orange County (Santa Ana) and Las Vegas.

As I mentioned, Planet 13 Holdings had many issues with the COVID lockdowns and lack of tourists to its dispensaries.  This muted growth.  And, I factored that in to some effect but, I kept revenue growth to a smaller percentage versus other cannabis companies.

I fully believe that the PLNHF stock forecast hits the mark for now, but that this will be blown out over the longer term.  With a solid surge in cannabis stocks from cannabis federal legalization it is very possible that PLNHF stock crosses above $15.00.

In the meantime, I have added PLNHF Stock Forecast into the Cannabis Stocks – Most Undervalued chart.

Is Planet 13 Holdings PLNHF Stock A Good Investment?

For the PLNHF stock forecast, I have only considered the current business framework for Planet 13 Holdings.  I have not incorporated the Florida acquisition, nor the Next Green Wave acquisition into the numbers.  This means that as these companies integrate there will be changes to PLNHF Stock forecast.

First, there will be more shares outstanding as these are stock deals.  With additional shares outstanding, this shifts the projection.  But, in exchange for the increased shares, Planet 13 Holdings will also be gaining revenue from Next Green Wave, and the vertical integration of the Florida dispensary system.

I will continually update the PLNHF stock forecast as the newly incorporated business come into the fold.

Is PLNHF stock a good investment?

Planet 13 Holdings has shown it can expand its business and is poising itself to move outside of its limited Nevada business into the rest of the country with California, Illinois, and Florida next.  By acquiring Next Green Wave, Planet 13 Holdings gets an outdoor grow facility and a new, expanded processing facility.  These are key elements to Planet 13 Holdings and its future.

Planet 13 Holdings is going to grow into its new foundation and grow revenue consistently.  Simultaneously, Planet 13 Holdings will also hit new economies of scale and improve margins along the way, providing a great deal of value for value investors looking for rapid revenue growth potential.

There is a reason why Planet 13 Holdings is in my Top Picks – The Best Cannabis Stocks.  Simply, they are one of the best and will outperform over many years while they expand into new markets.