Can Sundial Growers (SNDL) maintain its IPO momentum?

: sndl | Sundial Growers Inc. News, Ratings, and Charts

sndl – One of the newest IPOs in the cannabis sector was Sundial Growers (SNDL), and it’s been on fire since the stock was listed on the NASDAQ.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from!

One of the newest IPOs in the cannabis sector was Sundial Growers (SNDL), and it’s been on fire since the stock was listed on the NASDAQ. The stock has nearly doubled in a few short days since it started trading and a lot of investors are curious to know if the company will be able to sustain its momentum since their IPO. One thing we are going to examine is if Sundial Cannabis is targeting the right segments of the market in order to sustain momentum since their IPO or if they have just timed the market perfectly, so far. Another interesting fact was that Sundial Growers chose the NASDAQ over the TSX first as they wish to gain a wider investor base. During a recent interview with the company’s CEO during the first day of the company’s IPO, the CEO mentioned a few key points to note for the company. Torsten Kuenzlen CEO of Sundial growers mentioned that the company will be focusing on building a sustainably profitable business and then scaling as opposed to building a huge business and then turning it profitable. The company wishes to prove its concept and expand on it by maintaining investor confidence. He mentioned that the company wishes to focus on gobbling up market share with its premium brands and eventually diving into the CBD market in Europe as well. They recently acquired Bridge Farm which is an indoor agricultural producer of edible herbs and ornamental flowers in the UK. The company plans to grow Hemp at Bridge Farms 1.6 million square foot facility although currently, only 40,000 square feet of space is available for use.

When it comes to revenue, that number has become increasingly important to investors as these companies mature and push towards profitability. Growing revenue in 2018 was seen among one of the most important aspects of the cannabis sector with promises of profitability to come. Sundial Growers wished to do it the other way around, they are focused on starting out profitable and growing the business along the way, claims their CEO. Sundial’s market cap currently sits at just over 1 Billion dollars the US and the company posted tiny revenues of just 1.5 million dollars for the first quarter along with a 16.7-million-dollar loss. The company does plan to see a rapid increase in revenues in the range of 19 million to 21 million although still expects steep losses. For the company’s first public earnings report, they will really have to bring something substantial to the table in the form of results or outlook to justify the company’s sky-high valuation. The company totes a different business model than its competitors and it will be interesting to see if that model can deliver.

The question remains, can we justify the valuation when it comes to Sundial growers or has the company timed their IPO date just perfectly. As the Canntrust scandal cools down and the stock markets stabilize, many cannabis stocks have bounced off recent lows and the future is looking a bit brighter for the sector in general as earnings so far this quarter have been fairly impressive. I think this company has a lot to prove in such a competitive sector where IPOs can get crushed, we will be watching from the sidelines until the company provides more guidance and instills further confidence when it comes to their valuation.

(Disclosure: We do not own Sundial Growers)

SNDL shares were trading at $11.87 per share on Friday morning, down $0.43 (-3.50%). Year-to-date, SNDL has gained 39.98%, versus a 17.34% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaron Missere

Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
SNDLGet RatingGet RatingGet Rating
CGCGet RatingGet RatingGet Rating
ACBGet RatingGet RatingGet Rating
CRONGet RatingGet RatingGet Rating
APHAGet RatingGet RatingGet Rating
TLRYGet RatingGet RatingGet Rating

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from!

Top Stories on

: OKTA | Okta, Inc. -  News, Ratings, and Charts

Where are Shares of Okta Inc. (OKTA) Headed Next?

Okta Inc. is a company that provides identity solutions for a wide range of businesses and government agencies in the United States and around the world.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

3 Investment Lessons Learned in 2019

SPY is up 25% year to date. That we know. Now let's discuss 3 additional lessons learned this year and how it will help us chart a course to greater investment success in 2020.
: ogi | Organigram Holdings Inc. News, Ratings, and Charts

Does OrganiGram’s (OGI) New Equity Program Mean it’s Time to Buy the Stock?

This week, OrganiGram Holdings Inc. (OGI) announced it had established an At-The-Market equity program allowing the company to issue up to C$55,000,000 of common shares from its treasury to the public
NYSE: DIS | Walt Disney Company (The)  News, Ratings, and Charts

Why I’m Bearish On Disney (DIS) in the Short-term

I know being bearish on Disney (DIS) might cast me as a villain but I have to got to call it like I see it.  And I think it’s stock is due for a pullback and I will be employing a limited risk option strategy.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

Market Commentary: I Normally Love Sausage, But This is Crazy

It will be hard for stocks (SPY) to make it to new highs without the China trade deal being finalize. But that doesn't mean to run away from the market either. Read on for more.

Read More Stories

More Sundial Growers Inc. (sndl) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All sndl News
Page generated in 1.97 seconds.