SNDL Stock: 3 Key Things to Watch When SNDL Reports Earnings

  • SNDL (SNDL) will report its second-quarter earnings on Aug. 12.
  • Analysts expect revenue of $162.05 million from the company.
  • SNDL stock is down over 50% year-to-date (YTD).
marijuana in storage
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On Aug. 12, SNDL (NASDAQ:SNDL) will report its second-quarter earnings after the market close. Last month, the Canada-based marijuana company received approval from shareholders to complete a 1-for-10 reverse stock split, which it has since enacted. The company conducted the reverse split in order to stay in compliance with Nasdaq requirements. Now, shareholders have even more news to watch ahead.

Reverse splits reduce the number of shares outstanding to increase the price per share. However, this does not fundamentally change anything about the company. Following the reverse split, there are now 237.9 million common shares of SNDL stock outstanding.

In addition to the split, shareholders also approved the company’s name change from “Sundial” to “SNDL” last month. The company will publicize more details on the rebranding once it releases earnings. SNDL recently announced that Chief Administrative Officer David Gordey has stepped down as well.

With that in mind, let’s take a look at three key metrics investors will want to watch out for in SNDL’s upcoming earnings.

SNDL Stock: 3 Key Things to Watch When SNDL Reports Earnings

SNDL’s consensus analyst estimate for Q2 revenue is $162.05 million. The low estimate for quarterly sales falls at $145.87 million while the high estimate sits at $182.15 million. During Q1, SNDL reported revenue of $17.6 million. However, that figure did not include revenue from the company’s acquisition of Alcanna. Including Alcanna, Q1 revenue came to about $164 million.

For Q2, analysts also expect an earnings per share (EPS) loss of 2 cents. In the past eight quarters, SNDL has fallen short on revenue estimates seven times. Over the same period, the company has missed EPS estimates five times.

A miss on either revenue or EPS could send shares of SNDL stock lower. Although the company is Canada’s largest distributor of marijuana and liquor, it has failed to live up to its growth potential in recent quarters.

Finally, looking ahead at guidance, analysts expect Q3 revenue of $164.91 million and an EPS loss of 2 cents. For the full year, analysts also forecast revenue of $521.65 million and an EPS loss of 12 cents.

As of Q1, SNDL had no debt and “over $1 billion of cash, marketable securities and long-term investments.” That cash balance is larger than the company’s current market capitalization. Seeking Alpha reports that this will likely be enough for SNDL to operate through a sustained economic downturn.

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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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