Analyst Sees Jushi Holdings At A Premium Multiple After Earnings

Analyst Sees Jushi Holdings At A Premium Multiple After Earnings
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Jushi Holdings Inc (OTCMKTS:JUSHF) is set to release its next earnings report in a little more than a month, and Canaccord Genuity analysts expect the company’s results to be in line with guidance. They expect a “robust” outlook for this year due to upcoming store openings in Illinois, Pennsylvania and California.

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Q4 2020 hedge fund letters, conferences and more

Boosting sales Q4 sales estimate for Jushi Holdings

Analyst Bobby Burleson raised his revenue estimate for the fourth quarter from $29.5 million to $32.5 million, bringing it to the midpoint of the company's guidance. He maintained his adjusted EBITDA estimate at $3 million.

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Burleson believes Jushi Holdings is an attractively positioned multi-state operator due to its rapidly growing footprint. He noted that the company is not only in medical marijuana markets but also in recreational and limited license markets as well and that Illinois and Pennsylvania contribute about 75% of Jushi's sales. However, he pointed out that the company is set apart by its license and assets in Virginia, where flower sales and adult recreational use were just approved.

With about $180 million in cash, Jushi has plenty of funding for expansion to more than double its number of dispensaries and add significant cultivation, processing and extraction capacity. Additionally, Burleson noted that there is a large supply of distressed cannabis assets in the U.S., and Jushi management has a strong track record for acquiring and integrating businesses. Thus, he sees substantial potential for inorganic growth as well.

The analyst reiterated his $10 price target and Speculative Buy rating on Jushi Holdings. He expects the company to command a premium multiple on his 2022 EBITDA estimate, especially as the Virginia market develops. He recently boosted his estimates for Jushi in Virginia for this year and next.

Cannabis Stocks Declining

Jushi Holdings stock declined during regular trading hours today, falling alongside other cannabis stocks. Jushi was down by about 6%, joined by Tilray (NASDAQ:TLRY) and its 5% slump. Canopy Growth Corp (NASDAQ:CGC) fell by about 2%, while Aurora Cannabis Inc (NYSE:ACB) was down by more than 3%. Hexo Corp (NYSE:HEXO), Cronos Group (NASDAQ:CRON) and Green Thumb Industries (OTCMKTS:GTBIF) were all in the red as well.

Pot stocks have taken a beating over the last few trading days. This month brought continued volatility for the sector, with a steep decline on March 8, followed by an uptrend through March 17.

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