Fire & Flower Q1 Revenue Almost Doubles, Loss Widens

Fire & Flower Holdings (FAF) reported a wider loss in Q1 2021 than a year earlier despite an increase in revenues. The cannabis retailer has more than 83 stores in its network.

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Total revenue came in at C$44.1 million in the first quarter of 2021, an increase of 90.7% from C$23.1 million in the prior-year quarter. The company’s Hifyre platform generated sales of C$2.8 million, up 252% year-on-year.

Fire & Flower posted positive Adjusted EBITDA of C$2.3 million, its fourth consecutive quarter of positive Adjusted EBITDA. This compares to an Adjusted EBITDA loss of C$1.4 million for Q1 2020.

Meanwhile, net loss totaled C$61.6 million in the quarter ended May 1, 2021, compared to a loss of C$12.7 million a year ago. On a per-share basis, the loss was C$0.21 in Q1 2021 versus C$0.08 in Q1 2020.

Fire & Flower CEO Trevor Fencott said, “We started 2021 off strong by delivering our fourth consecutive quarter of positive Adjusted EBITDA while posting record quarterly revenues. Despite the challenges produced by the COVID-19 pandemic, our retail business continued to drive strong sales growth as we expanded our retail footprint by bringing Fire & Flower to British Columbia, opening two new stores in Vancouver and bringing our total store count to 83 licensed cannabis stores.”

Fire & Flower has entered the U.S. market through a strategic licensing agreement and an acquisition option with American Acres Managers, accessing licensing opportunities in the California, Arizona, and Nevada markets. (See Fire & Flower Holdings stock analysis on TipRanks)

Two months ago, Echelon Capital Markets analyst Andrew Semple reiterated a Buy rating on FAF while lifting its price target to C$1.90 (from C$1.75). This implies 72.7% upside potential.

“The company is well positioned to continue expanding in the Canadian cannabis market, while it is also exploring international growth opportunities,” said Semple.

Consensus among analysts is that FAF is a Moderate Buy based on 2 Buys. The FAF average analyst price target of C$1.89 implies 72.2% upside potential to current levels.