US multistate cannabis operator Curaleaf Hldgs Inc. (CSE:CURA, OTCQX:CURLF) saw its fourth quarter revenue miss estimates after a “messy” quarter marred by retail closures and headcount reductions.
For the three-month period to end December 31, 2022, Curaleaf generated $352.5 million in revenue, a 14% increase year-over-year, but below consensus estimates of $482 million.
The group also reported a net loss per share of $0.36 versus the $0.10 loss it reported in the same year-ago quarter and falling short of the $0.05 loss expected by analysts.
Adjusted EBITDA for the period came in at of $73 million, representing a 21% margin on revenue, excluding non-cash goodwill impairments and inventory write-downs of $225 million.
For the full year 2022, Curaleaf's revenue was $1.34 billion, up 12% year-over-year, with an adjusted EBITDA of $305 million.
The company had operating cash flow of $46 million and a cash balance of $163 million.
Curaleaf executive chairman Boris Jordan stated that the results further solidified the company's position as a leader in the industry, adding that the company would continue to invest in the right opportunities for growth domestically and abroad.
Stifel lowers price target
In a note calling the cannabis firm’s 4Q results “messy,” analysts at Stifel have lowered its price target on Curaleaf stock by $1.50 to $6.50.
That said, Stifel analysts were slightly more positive about the year to come after Curaleaf’s management updated its 2023 free cash flow (FCF) guidance from $125 million to $50-60 million.
“We reiterate the initial FCF goal seemed aggressive and believe its new guidance remains strong given the H2/23 sales and margin expansion implied, relying on limited visibility of new stores opening in Illinois and New Jersey with gross cost savings announced which could partly be offset by ongoing investments in growth markets,” analysts wrote.
“Matched with the recent volatile guidance track record, we opt for more conservative estimates which we can revisit upon successful execution.”
Shares of Curaleaf were trading 3.4% lower on the Canadian Securities Exchange on Tuesday afternoon at C$3.40.
Contact Angela at angela@proactiveinvestors.com
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