Analysts Expect MedMen’s Revenue to Rise in 2019 and 2020


Jan. 11 2019, Updated 2:45 p.m. ET

First-quarter performance

In the first quarter of fiscal 2019, which ended on September 30, MedMen Enterprises (MMEN) (MMNFF) posted revenue of $21.46 million, a rise of 1,086% from $1.81 million in the corresponding quarter of fiscal 2018.

MedMen’s revenue consisted of direct sales from its retail stores. The company’s cultivation and wholesale production operations didn’t generate any material revenue during the quarter. A total of 86% of the company’s revenue was generated from its operations in California, while the remaining 14.0% came from its New York and Nevada operations. MedMen’s revenue growth was primarily driven by its opening of seven new retail stores and strong sales in California.

During the same period, MedMen’s peers Acreage Holdings (ACRG-U) (ACRGF), Planet 13 Holdings (PLTH) (PLNHF), and Curaleaf Holdings (CURA) (CURLF) posted revenues of $5.5 million, $4.9 million, and $21.4 million, respectively.

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Analysts’ revenue expectations

For fiscal 2019, analysts expect MedMen to post revenue of $187.7 million, which represents a year-over-year rise of 371.7% from $39.8 million in fiscal 2018. They also expect the company’s revenue to rise 165.6% to $498.5 million in 2020.

As of December 24, MedMen operates 19 retail stores and three cultivation and production facilities. However, excluding PharmaCann’s permits, the company has the permits to operate 52 retail stores and nine cultivation and production facilities, so there’s a huge scope for expansion. Also, on October 5, the company launched a new cannabis product under its [statemade] brand. The product line includes drops, vaporizer pens, flowers, and pre-rolls. These new products are expected to drive the company’s revenue.

Analysts’ net income expectations

In fiscal 2018, MedMen incurred a loss of $112.83 million. Analysts expect the company’s loss to increase to $117.9 million in fiscal 2019. However, they expect the company to see a net profit of $77.8 million in fiscal 2020.

Next, let’s look at analysts’ recommendations for the stock.


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