On Wednesday, Roth/MKM maintained its Buy rating on Curaleaf Holdings (OTC:CURLF) Inc. (CURA:CN) (OTC: CURLF), while raising the stock's price target from $4.00 to $7.00. The firm anticipates that Curaleaf will unveil its fourth-quarter earnings for 2023 after the market closes on March 6, with expectations of a modest quarter-over-quarter increase in revenue.
The analyst from Roth/MKM predicts that Curaleaf's revenue and EBITDA will grow slightly, driven by its strong market presence in Maryland and New Jersey and improved cost controls. These positive factors are expected to be partially offset by pricing pressures and underutilization of some facilities.
Curaleaf's management has provided guidance for the fourth quarter of 2023, forecasting a slight increase in revenue from the previous quarter and improvements in margins and cash flows. These enhancements are anticipated to stem from effective operational execution and strategic consolidation decisions.
The growth outlook for Curaleaf is also bolstered by the recent legalization of cannabis in Germany, which is expected to contribute to the company's growth in the second half of 2024.
The raised price target to $7.00 reflects the analyst's confidence in Curaleaf's future performance and market opportunities.
InvestingPro Insights
As Curaleaf Holdings Inc. (OTC: CURLF) gears up to release its fourth-quarter earnings for 2023, investors are eyeing the company's financial health and market performance with keen interest. According to InvestingPro data, Curaleaf has a market capitalization of $3.66 billion, which showcases the company's significant presence in the cannabis market. Despite the optimistic view from Roth/MKM, the company's P/E ratio stands at a negative -7.56, reflecting its current lack of profitability.
InvestingPro Tips suggest that Curaleaf's stock price movements have been quite volatile, which may indicate a higher risk for investors looking for stable returns. Moreover, the company's short-term obligations exceed its liquid assets, suggesting potential liquidity challenges. It's worth noting that Curaleaf has experienced a strong return over the last three months, with a price total return of 32.63%, and an even more impressive uptick over the last six months at 80.52%.
While the company does not pay dividends, which could be a drawback for income-focused investors, the substantial revenue growth of 12.75% in the last twelve months as of Q3 2023, and a modest quarterly revenue growth of 2.26% in Q3 2023, may point towards a positive trajectory. However, with analysts not anticipating profitability this year and the company not being profitable over the last twelve months, investors should consider the growth potential against the backdrop of these financial metrics.
For those interested in a deeper analysis, there are additional InvestingPro Tips available for Curaleaf, which can be accessed on the InvestingPro platform. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and uncover more insights that could inform your investment decisions.
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