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Greenlane Holdings Recovers after Slumping to All-Time Low


Jun. 20 2019, Updated 10:22 a.m. ET

Greenlane Holdings

Yesterday, Greenlane Holdings (GNLN) fell a whopping 17.1%. The stock has now fallen 28% this month, and it hit its all-time low yesterday. Greenlane Holdings listed in April and priced its IPO at $17 per share. However, since the stock surged more than 25% after its listing, it has been a sorry story for Greenlane Holdings investors. Based on yesterday’s closing prices, Greenlane Holdings has fallen more than 35% from its IPO issue price. However, the stock is in the green in early trading today.

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Greenlane Holdings is an ancillary cannabis play, and it isn’t involved in cannabis cultivation. Greenlane Holdings is a distributor of vaporization products and other accessories. The company posted a net loss of $17.6 million in the first quarter on sales of $49.9 million. While cannabis companies are posting an astronomical increase in revenues, Greenlane Holdings’ first-quarter revenues rose only about 15%. The company is expected to post revenues of $213 million this year. Next year its revenues are expected to rise 32% to $282 million. Greenlane Holdings is expected to post a net profit of $8 million in 2020 and $18 million in 2021. While Greenlane Holdings does not offer the kind of growth that pure-play cannabis players offer, its valuation is also in line with its growth prospects. The company is valued at an EV-EBITDA of 11.5x its 2020 estimates and 6.4x its 2021 estimates.

Analysts’ recommendations

Meanwhile, amid the slump in Greenlane Holdings stock price, Canaccord Genuity, which has a “speculative buy” rating on the stock, today lowered its target price from $22 to $20. Overall, Greenlane Holdings has received a “strong buy” rating from three analysts, while two analysts have a “buy” rating on the stock. The stock’s mean consensus price target of $22.1 represents more than 100% upside over its closing prices yesterday.


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