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Charlotte’s Web Holdings Continues Its Good Run after Strong Q1

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Charlotte’s Web Holdings

Charlotte’s Web Holdings (CWBHF) rose 75% in the first quarter. The stock was strong in March also even as cannabis stocks (HMMJ) in general came under pressure. Cronos Group (CRON), CannTrust (CTST), and Canopy Growth (WEED) fell 15%, 14%, and 9%, respectively, in March. However, thanks to the strong returns in the first two months, most cannabis stocks with the exception of Tilray (TLRY) are still up handsomely on a year-to-date basis.

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Fourth-quarter earnings

Charlotte’s Web Holdings reported its fourth-quarter earnings on March 28 after the markets closed and held its earnings call the next day. Charlotte’s Web Holdings posted revenues of $21.5 million in the fourth quarter as compared to $12.6 million in the corresponding quarter in 2017. However, its adjusted EBITDA fell from $4.7 million to $4.3 million over the period.

Key highlights

The company missed consensus estimates for both its top line as well as bottom line. However, from an operational standpoint, Charlotte’s Web Holdings reached several milestones last year. It had a record harvest of 675,000 pounds in 2018 as compared to 63,000 pounds in 2017. Charlotte’s Web Holdings has been actively expanding its distribution, and its products are now available across more than 4,000 locations in the United States. In the fourth quarter, Charlotte’s Web Holdings got 57% of its revenues from e-commerce.

While the stock fell 2.1% on March 29 after missing earnings estimates, it resumed its upwards trajectory yesterday with gains of 5.9%.

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