On Monday, Curaleaf Holdings (OTCMKTS:CURLF) announced that it will expand its Select brand products in Connecticut. With the announcement, patients will be able to buy Select Elite Live cartridges at local medical dispensaries across the state soon. Meanwhile, Curaleaf completed the acquisition of the Select brand in February. The Select products were available in Oregon, California, Arizona, and Nevada. Recently, the company expanded its products to Colorado, Michigan, Maryland, and Oklahoma. Curaleaf plans to expand Select brand products to other states as well. As reported by Curaleaf, all Select brand products are produced from strain-specific terpenes, which enhances their flavors.
In the press release, Curaleaf’s president, Joe Bayern, said, “We are committed to providing essential medicine to over 40,000 patients in Connecticut with consistent, high quality Select products. We also commend state lawmakers for adding chronic pain and Ehlers-Danlos Syndrome to its list of MMP qualifying conditions, and we look forward to providing quality medicine to current and future patients.”
Curaleaf reported a mixed Q1 performance
Last month, Curaleaf reported a mixed first-quarter performance. The company missed analysts’ revenue expectation by approximately 2%. The adjusted EBITDA came in at $20.0 million, which beat analysts’ expectations by 27.4%. The company’s net loss for the quarter was also better than analysts’ expectations. Read Why Did Curaleaf Report a Mixed Q1 Performance? to learn more.
So far this year, Curaleaf has lost 9.8% of its stock value. Weakness in the cannabis industry and lower-than-expected first-quarter sales led to a fall in the company’s stock price. Meanwhile, the company has outperformed cannabis ETFs and its peers. The ETFMG Alternative Harvest ETF (NYSE:MJ) has declined by 20.6% YTD. OrganiGram Holdings (NASDAQ:OGI), MedMen Enterprises (OTCMKTS:MMNFF), and Cresco Labs (OTCMKTS:CRLBF) have fallen by 16.6%, 52.1%, and 34.7%, respectively.
Analysts’ expectations and recommendations
Analysts expect Curaleaf to report revenues of $585.1 million and $1.05 billion in 2020 and 2021, respectively. The estimates represent a YoY growth of 164.7% in 2020 and 79.1% in 2021. Also, analysts expect the company’s EBITDA to rise by 429.6% in 2020 to $137.2 million and 145.8% in 2021 to $337.2 million.
Since Curleaf reported its first-quarter earnings, Cowen and MKM Partners have raised their target prices. Cowen increased its target price from 7 Canadian dollars to 8 Canadian dollars. MKM Partners raised its target price from 6.5 Canadian dollars to 8 Canadian dollars. As of Monday, analysts’ consensus target price stood at 14.72 Canadian dollars, which represents a 12-month return potential of 99.4%. Overall, analysts are bullish on Curaleaf. Of the ten analysts, nine recommend a “buy,” while one recommends a “hold.” None of the analysts recommend a “sell.”
I have been bullish on Curaleaf for some time. Many US states are warming up to cannabis. So, I think that the cannabis market will grow in the US. With Curaleaf’s recent acquisitions, it’s well-positioned to gain from the growth in US cannabis sales. So, I think that investors should accumulate the stock on dips.