Shares of Sundial Growers (NASDAQ:SNDL) popped in Thursday’s pre-market trading as investors reacted to the Canadian cannabis producer’s fourth-quarter results. SNDL stock was up 4.5% as of 8:30 am Eastern. Here are five takeaways.
No. 1: While the firm announced a net loss of 64.1 million CAD ($51.4 million), that was an improvement on both a quarter-to-quarter and year-over-year basis. Those comparative respective losses were 71.4 million CAD and 145.9 million CAD.
No. 2: Net cannabis revenue of 13.9 million CAD was up 8% sequentially but down more than 5% YOY. Analysts estimated revenue of 12.1 million CAD.
No. 3: The results showed adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations loss of 5.6 million CAD in Q4. In the preceding Q3, the firm posted a loss of 4.4 million CAD.
No. 4: The company said average gross selling price per gram equivalent of branded products was 5.05 CAD per gram in 2020, net of provisions, compared to 6.24 CAD per gram in the prior year as a result of industry-wide price compression and a shift to value product. Sundial anticipates continued downward price pressure throughout the industry in the coming year due to continuing competition and relative oversupply.
No. 5: As well, Sundial said it had an unrestricted cash balance of approximately 719 million CAD as of this week. That’s no surprise as the company has been able to raise a boatload of money in equity markets, recently tapping the market on Feb. 2 for $75 million, which added to an already-impressive war chest of over 600 million CAD.
SNDL Stock Moves Anticipated Results
As a small cannabis player, Sundial has remained unprofitable, which is unsurprising news to investors. However, after flirting with bankruptcy and avoiding delisting recently due to a sharp retail-driven spike in its share price, SNDL stock has a new lease on life.
Since hitting an intra-day low around 92 cents per share on March 5, shares of SNDL stock have steadily climbed higher. In recent days, the company’s share price has breached the $1.50 level and appears to be hurtling toward a two-bagger in less than a couple weeks.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.