SNDL (SNDL) AI Stock Analysis

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SNDL

(NASDAQ:SNDL)

60Neutral

SNDL's overall score reflects strong growth in revenue and a robust balance sheet, but significant profitability challenges and valuation concerns weigh on the stock. Positive sentiment from the earnings call, particularly regarding the cannabis segment and strategic acquisitions, provides some upside potential. However, technical indicators suggest caution as the stock exhibits bearish momentum.

SNDL (SNDL) vs. S&P 500 (SPY)

Market Cap

$357.65M

Dividend YieldN/A

Average Volume (3M)1.50M

Price to Earnings (P/E)―

Beta (1Y)0.77

Revenue Growth-2.89%

EPS Growth47.06%

CountryUS

Employees2,604

SectorTechnology

Sector Strength44

IndustryDrug Manufacturers - Specialty & Generic

Share Statistics

EPS (TTM)-0.26

Shares Outstanding257,300,000

10 Day Avg. Volume1,415,960

30 Day Avg. Volume1,503,517

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.66

Price to Cash Flow (P/CF)6.60

P/FCF Ratio6.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.00

Price Target Upside115.83% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

SNDL Business Overview & Revenue Model

Company DescriptionSNDL Inc. is a diversified business operating in the cannabis and alcohol sectors. The company is engaged in the cultivation, distribution, and sale of cannabis products for both the medical and adult-use markets. Additionally, SNDL has a significant presence in the retail segment, offering a range of cannabis-related products. The company also has investments in the alcohol space, particularly within the Canadian market, further diversifying its portfolio.

How the Company Makes MoneySNDL Inc. generates revenue through multiple streams within its diversified business model. In the cannabis sector, the company earns money from the cultivation and sale of cannabis products, including dried flower, pre-rolls, vapes, oils, and edibles, aimed at medical patients and adult recreational users. Their retail operations, which include ownership of dispensaries, contribute significantly to revenue by selling a variety of cannabis products. In the alcohol sector, SNDL's revenue is derived from its investments and partnerships with alcohol production and distribution companies, allowing it to capitalize on the growing demand for alcoholic beverages. The company's earnings are further supported by strategic partnerships and acquisitions that enhance its market presence and product offerings across its operational sectors.

SNDL Financial Statement Overview

Summary

SNDL shows strong revenue growth and a solid balance sheet, but persistent profitability issues and historical cash flow challenges pose risks. Improvement in cash flow is noted, yet operational efficiency needs enhancement to sustain profit growth.

Income Statement

Neutral

SNDL shows a robust revenue growth trend, with a significant increase from 2020 to 2024. However, profitability remains a challenge as evidenced by negative EBIT and net income margins. The company's gross profit margin improved over the years, signaling better cost management. Overall, while revenue growth is promising, persistent losses dampen the income statement outlook.

Balance Sheet

Positive

The balance sheet is strong with a high equity ratio and low debt-to-equity ratio, indicating financial stability and low leverage. Stockholders' equity is consistently high relative to total assets, reflecting a solid capital structure. Despite a decrease in cash holdings, the company's debt levels remain manageable, suggesting a stable financial position.

Cash Flow

Positive

SNDL's cash flow performance has improved, with a positive shift in free cash flow and operating cash flow in 2024 compared to previous years. The operating cash flow to net income ratio is positive, indicating effective cash generation relative to earnings. However, past negative free cash flow and large financing activities hint at underlying cash management challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
920.45M	909.01M	712.20M	56.13M	60.92M
	Gross Profit
240.33M	190.41M	140.38M	-6.99M	-49.87M
	EBIT
-103.81M	-163.17M	-61.27M	-132.13M	-185.40M
	EBITDA
-41.20M	-99.15M	-306.83M	-127.41M	-180.69M
	Net Income Common Stockholders
-94.80M	-172.66M	-372.43M	-230.18M	-255.93M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
248.89M	201.64M	311.76M	649.03M	60.38M
	Total Assets
1.35B	1.47B	1.56B	1.42B	294.87M
	Total Debt
152.27M	167.03M	169.83M	33.47M	1.44M
	Net Debt
-66.09M	-28.01M	-109.75M	-524.78M	-58.94M
	Total Liabilities
215.89M	243.82M	231.69M	98.13M	25.18M
	Stockholders Equity
1.13B	1.21B	1.31B	1.33B	265.24M
Cash Flow		Free Cash Flow
43.90M	-24.58M	-17.57M	-159.23M	-60.67M
	Operating Cash Flow
54.91M	-16.65M	-6.71M	-155.44M	-57.49M
	Investing Cash Flow
17.76M	-24.82M	-230.16M	-496.28M	-70.88M
	Financing Cash Flow
-49.36M	-43.08M	-41.79M	1.15B	142.75M

SNDL Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.39

Price Trends

50DMA

1.55

Negative

100DMA

1.69

Negative

200DMA

1.88

Negative

Market Momentum

MACD

-0.05

Negative

RSI

44.96

Neutral

STOCH

80.00

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNDL, the sentiment is Negative. The current price of 1.39 is below the 20-day moving average (MA) of 1.40, below the 50-day MA of 1.55, and below the 200-day MA of 1.88, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 44.96 is Neutral, neither overbought nor oversold. The STOCH value of 80.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNDL.

SNDL Risk Analysis

SNDL disclosed 78 risk factors in its most recent earnings report. SNDL reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

SNDL Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNDL	60 Neutral	$357.65M	―	-8.00%	―	-2.89%	47.06%
Sector *	58 Neutral	$9.99B	10.12	-6.46%	3.10%	7.47%	-11.60%
TLRY	44 Neutral	$452.92M	―	-31.06%	―	11.22%	-108.58%
FLGC	42 Neutral	$9.72M	―	-291.50%	―	-22.58%	82.94%
YCBD	37 Underperform	$1.43M	―	-60.98%	―	-18.02%	78.28%
COSM	37 Underperform	$8.67M	―	-58.30%	―	―	―
IXHL	35 Underperform	$17.91M	―	-240.02%	―	―	―

* Technology Sector Average

Performance Comparison

SNDL

1.39

-0.68

-32.85%

YCBD

cbdMD

0.24

-0.67

-73.63%

TLRY

Tilray

0.46

-1.38

-75.00%

COSM

Cosmos Holdings

0.36

-0.17

-32.08%

FLGC

Flora Growth

0.52

-1.22

-70.11%

IXHL

Incannex Healthcare Limited Sponsored ADR

0.56

-1.72

-75.44%

SNDL Earnings Call Summary

Earnings Call Date: Mar 18, 2025 | % Change Since: -10.32% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth in the cannabis segment and achievements like positive free cash flow, record net revenue, and strategic acquisitions. However, challenges such as the negative fair value adjustment and liquor segment decline were noted. Overall, the positive aspects and growth initiatives outweighed the challenges.

Highlights

Record Net Revenue and Growth

SNDL reported record full-year net revenue of $920 million, representing a 1.3% growth year-over-year, driven by a 10.6% growth in the cannabis business.

Positive Free Cash Flow

SNDL achieved positive free cash flow for the first time, reporting $8.9 million for the full year 2024, exceeding their guidance and marking a $70 million improvement compared to 2023.

Cannabis Segment Performance

The cannabis operations segment saw a significant transformation with net revenue growth rates of 42% in Q4 and 26% for the full year, reaching $109.5 million.

Strategic Acquisitions and Growth Initiatives

SNDL completed the acquisition of Indiva and announced the acquisition of the remaining minority equity interest in Nova, positioning SNDL as the largest manufacturer of infused edibles in Canada.

Strong Balance Sheet

SNDL ended the year with $218 million in unrestricted cash and zero outstanding debt, highlighting their financial stability.

Lowlights

Negative Fair Value Adjustment

A $65.7 million non-cash negative fair value adjustment to the Sunstream investment impacted the adjusted operating income for Q4 2024.

Liquor Segment Challenges

The liquor segment faced a 3.4% revenue decline in Q4 2024 compared to the previous year, attributed to continuous market headwinds.

Company Guidance

During the call, SNDL provided detailed guidance on their financial performance in the fourth quarter and full year of 2024. The company reported record net revenue of $257.7 million for Q4, marking a 3.7% increase year-over-year, driven largely by a 16.5% growth in their cannabis business, which included new contributions from the Indiva acquisition. The liquor segment faced a 3.4% decline in net revenue due to market headwinds, yet still achieved a gross margin improvement to 22% in Q4. Overall, SNDL achieved a record gross profit of $68.8 million, reflecting a 20% increase from the prior year and resulting in a gross margin of 26.7%, a 360 basis point improvement. Free cash flow was positive at $11.6 million for the quarter and $8.9 million for the full year, surpassing their guidance. The company ended the year with $218 million in unrestricted cash and zero debt. Looking ahead, SNDL aims to deliver $100 million in annualized free cash flow within the next three years, leveraging strategic investments and operational efficiencies to drive long-term growth and shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.