Fire & Flower Holdings Corp (FAF)

[FUNMAN]

PI Financial Reiterates FFLWF's $20 Price Target Following Q3 Results <<<--- Is this a load of BS?

December 15, 2021 3:39 PM

There's no mystery here. They have to grow revenues and profits. In the small Canadian marketplace, increased competition keeps nipping at Fire & Flower.

They have created the most complete consumer experience, and their digital platforms are easily transportable to other marketplaces as legalization expands.

ACT is also going to be a major influencer as more co-branded side-by-side locations open. The only limitation is license acquisition.

Otherwise they've already certified their test results and announced they are moving forward. They are capable of carving out hundreds of spaces all across Canada in their convenience / gas station locations with lower fixed costs than typical stand alone or strip mall retail locations.

It's going to get very interesting if / when legalization occurs in the USA and or Germany. - FUNMAN

https://thedeepdive.ca/fire-flower-sees-pi-financial-reiterate-20-price-target-following-q3-results/

On December 14th, Fire and Flower Holdings Corp (TSX: FAF) announced its third quarter results ending October 31st, 2021. The company reported total revenues of $45.4 million, with a gross profit of $15.7 million or a 34.6% margin. The company reported a positive adjusted EBITDA for the 6th consecutive quarter, coming in at $2.1 million while the company reported another net loss of $1.98 million or an -$0.06 earnings per share.

Fire & Flower currently has 5 analysts covering the stock with an average 12-month price target of C$15.50 or a 166% upside from the current stock price. All 5 analysts currently have buy ratings on the stock. The street high sits at C$20 from PI Financial while the lowest price target comes in at C$12.

In PI Financial’s third quarter review, they reiterate their C$20 12-month price target and buy rating, saying that their takeaway is that the company’s digital platform continues to be the highest contributor to their adjusted EBITDA.

For the results, PI says that this quarter was fairly neutral as adjusted EBITDA dropped roughly 34% quarter over quarter and came in about $1.5 million below consensus estimates. They attribute this miss to an increase in corporate costs. Although, revenue came in line with PI’s expectations even as same-store sales dropped 27% year over year.

PI says that Fire & Flower has seen increased competition and further price compression in many of its key provinces and doesn’t expect that issue to slow down. They note that Ontario has added 228 stores during this quarter, which will most likely make same-store sales continue to drop.

Lastly, PI Financial notes that Fire & Flower added 6 new retail locations this quarter and 5 since the quarter ended. This brings their total stores to 102 now and expects that Alimentation Couche-Tard to help the company to continue to open stores in Alberta, Saskatchewan, and Manitoba over the next couple of months.