Canadian retail-focused cannabis company High Tide Inc. (TSE:HITI) (NASDAQ:HITI) reported encouraging results for the third quarter of Fiscal 2022. The company’s earnings and revenue figures comfortably beat the Street’s expectations in the reported quarter.
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Q3 Earnings in Detail
High Tide reported a net loss per share of C$0.04, more than the year-ago loss of C$0.03 per share. However, the metric is narrower-than-the analysts’ estimate of a loss of C$0.09 per share.
There was a 98% year-over-year surge in the company’s revenues to C$95.4 million in the third quarter of Fiscal 2022. The top line conveniently surpassed the Street estimate of C$89 million.
Furthermore, same-store sales rose by 46% over the year-ago period. High Tide also saw a 44.7% year-over-year rise in Cabanalytics data sales to C$5.5 million in the reported quarter.
However, the transition in retail pricing strategy to a discount club model hurt the company’s gross margin levels. The metric at 27% compared unfavorably with the year-ago quarter’s 35%.
High Tide witnessed revenue growth across all geographies. There was a 110% year-over-year surge to C$80.7 million in revenues from the Canadian region in the reported quarter. Furthermore, revenues from the United States increased 33% year on year to C$12.7 million in the third quarter of Fiscal 2022. Moreover, there was a stupendous 1,486% year-over-year rise to C$1.9 million in global revenues.
High Tide exited third-quarter Fiscal 2022 with cash on hand of C$18.3 million in comparison to C$14.0 million as of October 31, 2021.
During the third quarter, it opened five new Canna Cabana retail stores. High Tide, which currently operates 140 retail cannabis stores across Canada, aims to expand to 150 stores by the end of the calendar year.
Is High Tide a Good Stock to Buy?
As of now, High Tide stock seems like a decent option to invest in. According to a TipRanks tool, financial bloggers seem bullish about HITI stock. Financial bloggers’ opinions are 100% Bullish on HITI stock, above the sector average of 64%.
Meanwhile, analysts have mixed feelings about High Tide stock. According to TipRanks, Street is cautiously optimistic about HITI stock, which carries a Moderate Buy consensus rating based on two Buys and one Hold. Notably, shares of HITI stocks are down 66.8% so far in 2022.
Final Thoughts
High Tide gives credit to its discount club model for the company’s impressive performance in the reported quarter. The company has been focusing on expanding organically as well as through acquisitions. Further, the growing membership in the company’s Cabana Club loyalty program buoys optimism. Finally, HITI stock’s average price target of C$8.44, signals a whopping 344.2% upside potential from its current level.
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