Curaleaf, CURLF stock, is one of the largest producers of cannabis as well as having the highest market capitalization. They have revenue of some $1.3B annually – which is expected to grow to $1.4B and $1.5B for 2024 & 2025, respectively. Given its size alone, this will attract a tremendous amount of interest when actual rescheduling occurs. All of this positions Curaleaf as the industry leader from a size standpoint.
But, Curaleaf is still not profitable. That may change, however, once cannabis is rescheduled simply because 280E may allow for enough profits to push Curaleaf over the net earnings profitability threshold. All of this could ignite CURLF stock upward as more and more are drawn back in to the investing sphere. After nearly three very long years of basic sideways action in price, many of these cannabis companies are nearing profit levels that the removal of 280E limitation may push them over that line. Given that Curaleaf is also the market leader, should CURLF up-list to a bigger exchange – moving out of the OTC Market, this will draw in considerably larger numbers of investors.
Because of these factors, CURLF stock has a lot working for it. For now, there is yet another mini-bear market CURLF stock as the waiting game continues. I am meeting all of these smaller moves lower with acquisitions of many stocks, to include MSOS stock as an alternative to direct investment into one particular stock.
Projected Revenue
The 2024 revenue projections put revenue growth at 5.80% for the year – should Curaleaf achieve these revenue gains. Analysts, across the board, expect solid revenue growth from the entire industry as well as Curaleaf. Curaleaf operates in 18 states with 150+ dispensaries and are slated to grow dispensary count further. These factors will play further into potential profits.
EBITDA Profits
On a quarterly basis, revenue growth has stagnated somewhat and this has affected EBITDA profits. The lack of growth in revenue has translated to a lack of growth of profits. But, the base for a bigger company exists and after cannabis rescheduling, very likely M&A activity will ensue and larger growth prospects will occur.
After cannabis rescheduling, companies will have access to better financing terms as well as better financial markets. But, this is also going to carry with it more accountability to growth and profits as more sophisticated investors will push for bigger growth rates and larger bottom lines.
In the meantime, with the projected revenue growth above, and a shift in legalization, a lot of eyes are going to be turning toward CURLF stock as being the leader in the industry for leadership. Look for improving bottom line and the first line to see that will be EBITDA profits as revenues increase.
Net Profits
This is where all eyes will start to move toward. As the industry progresses after cannabis rescheduling, Curaleaf will be pressed to start printing positive bottom line profits. On the one hand, the shift in cannabis rescheduling will alter the profit picture because removing the prohibitive 280E will mean bigger bottom line – it is projected that cannabis companies pay 7.5% – 10% more in taxation because of 280E. This will add to the bottom line, of course, but we don’t know the actual extent of which at this point.
Within a normal business, companies earn ~8.25% net earnings from revenue. Off of $1.45B in revenue, that amounts to $120M in profits. With 600M in shares outstanding, that translates in to ~$0.20 EPS. Forward earnings multiples would put the stock between $4.00 – $5.00.
CURLF Stock Chart
For now, earnings multiples are putting CURLF stock at normal profitability levels. But, Curaleaf will add in more profit potential for the company if they continue to open more stores and achieve a higher level of economies of scale. So, for now CURLF stock may be where it needs to be. But, the future is upward overall with Curaleaf and CURLF stock. As more M&A activity occurs, Curaleaf will be able to outpace the normal levels of average companies. These cannabis stocks are going to shift to growth stocks and maximizing opportunities will mean a higher overall rate of performance. I can see CURLF stock moving higher beyond the $4.00 – $5.00 range as the industry progresses and we see M&A activity that maximizes potential for the companies.
