The roller-coaster ride in Sundial Growers (NASDAQ:SNDL) stock looks ready to continue to thrill investors. SNDL stock is set to extend gains on Wednesday after a 17.8% surge yesterday.
It was only last week that the shares hit a six-month low of 95 cents a share on March 5.
Along for the ride now is Cantor Fitzgerald, which initiated coverage of the Canadian cannabis company today with a “neutral” rating. Analyst Pablo Zuanic set a 12-month price target of $1.15 on SNDL stock, pretty much where it started yesterday.
“Even though fundamentals have remained mixed, with an ongoing market-share loss according to the latest scanner data, and despite a 3Q20 reported net sales decline of 36% seq (-54% YoY), the run-up in the share price enabled the company to raise equity and convert warrants and debt,” Zuanic wrote in a note to clients.
“In an industry that is quickly consolidating, this puts the company in a good position to acquire smaller companies that have developed solid niches in parts of the Canadian market or overseas,” he wrote.
SNDL Stock Has Been Volatile
To be sure, SNDL stock has been a poster-child for cannabis stock volatility. In late January, traders on the r/WallStreetBets subreddit fueled outsized gains in the shares.
Before Redditors set their sights on SNDL stock, the pot grower was gaining traction along with others in the marijuana universe thanks to broader acceptance of cannabis use and expectations for further legalization or decriminalization, particularly at the federal level under President Joe Biden.
Ahead of yesterday’s double-digit gains, InvestorPlace contributor Josh Enomoto voiced concerns about SNDL stock, arguing that Sundial was overdue for a correction. However, contributor Craig Adeyanju, also on March 8, posited that the company’s early February registered offering provided a cash pile that puts it in position to make big moves in a consolidating sector.
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.
