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Curaleaf Stock Rises after Announcing Two Acquisitions

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Stock performance

The announcement today that Curaleaf will aquire Glendale Greenhouse and Phytotherapeutics Management Services appears to have increased investor confidence in the stock. Curaleaf Holdings (CURLF)(CURA) was trading in positive territory today. At 12:40 PM EDT, the company was trading at 9.65 Canadian dollars, which implies a rise of 1.6% from its previous day’s closing price.

Year-to-date, Curaleaf has returned 47.1% as of June 26. In comparison, Curaleaf’s peers MedMen Enterprises (MMEN)(MMNFF) and Planet 13 Holdings (PLTH)(PLNHF) have returned -16.9%, and 70.5%, respectively. The Horizons Marijuana Life Sciences ETF (HMMJ), which tracks the performance of publicly listed cannabis businesses in North America, has returned 26.6%.

Curaleaf reported its first-quarter earnings on May 30. You can read about the company’s performance in How Curaleaf Fared in the First Quarter.

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Analysts’ expectations and recommendations

Analysts expect Curaleaf to report revenue of $347.5 million in 2019, which represents a rise of 351% from $77.1 million in 2018. Also, they expect the company to become profitable in 2019 by delivering net profits of $44.0 million, compared to a net loss of $10.2 million in 2018.

Of the total eight analysts who follow Curaleaf, three have a “strong buy” rating as of June 26 while the remaining five have a “buy” rating. On average, analysts have a price target of 17.71 Canadian dollars, which implies a return potential of 86.4% from its stock price of 9.5 Canadian dollars as of June 26.

Valuation multiple

As of June 26, Curaleaf was trading at a forward enterprise value-to-sales multiple of 4.34x. On the same day, MedMen and Planet 13 were trading at 3.13x, and 2.68x, respectively.

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