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Ayr Wellness Inc. (TSE:AYR.A)
:AYR.A
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Ayr Wellness
(OTC:AYR.A)
43Neutral
Ayr Wellness (AYR.A) vs. S&P 500 (SPY)
Market Cap
C$34.36M
Dividend YieldN/A
Average Volume (3M)124.60K
Price to Earnings (P/E)―
Beta (1Y)1.41
Revenue Growth-1.02%
EPS Growth31.66%
CountryCA
Employees2,300
SectorHealthcare
Sector Strength78
IndustryPharmaceuticals
Share Statistics
EPS (TTM)-4.49
Shares Outstanding105,720,200
10 Day Avg. Volume181,707
30 Day Avg. Volume124,599
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.05
Price to Cash Flow (P/CF)0.40
P/FCF Ratio0.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$2.08Price Target Upside616.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Ayr Wellness Business Overview & Revenue Model
Company DescriptionAyr Wellness (AYR.A) is a leading vertically integrated cannabis company operating in the United States. The company is engaged in the production, distribution, and retail of cannabis products, catering to both medical and adult-use markets. Ayr Wellness offers a comprehensive range of products, including flower, concentrates, edibles, and vape products, under a variety of well-recognized brands. The company focuses on delivering high-quality cannabis experiences through its cultivation, manufacturing, and retail operations across multiple states.
How the Company Makes MoneyAyr Wellness generates revenue primarily through the cultivation, manufacturing, and retail sale of cannabis products. The company's vertically integrated model allows it to control the entire supply chain, from growing cannabis plants to processing and distributing finished products to consumers. Key revenue streams include the sale of cannabis flower, concentrates, edibles, and other derivative products through its owned retail dispensaries as well as wholesale distribution to third-party stores. Ayr Wellness also benefits from strategic acquisitions and partnerships that expand its market presence and product offerings, contributing to its overall earnings.
Ayr Wellness Financial Statement Overview
Summary
Ayr Wellness faces significant financial challenges with persistent losses, high leverage, and cash flow constraints. The company struggles with profitability and operational efficiency, posing risks to financial health and growth prospects. Strategic improvements are necessary to enhance financial stability and performance.Income Statement
Ayr Wellness showed a challenging financial performance with negative net income and decreasing gross profit. The TTM data reveals a negative EBIT margin of -7.88% and a negative net profit margin of -48.25%, indicating operational difficulties and profitability challenges. Revenue growth is stagnant, further exacerbating financial strain.34
Negative
Balance Sheet
The company exhibits a high level of leverage with a debt-to-equity ratio of 1.12, indicating reliance on debt financing. The equity ratio is moderate at 38.06%, providing some buffer against liabilities. However, the declining trend in stockholders' equity raises concerns about financial stability and potential solvency issues.46
Neutral
Cash Flow
Cash flow analysis highlights a negative free cash flow and a weak free cash flow to net income ratio, reflecting challenges in generating sufficient cash to cover expenses. The operating cash flow to net income ratio suggests inefficiencies in converting earnings to cash. The decline in free cash flow growth further underscores financial inefficiencies.30
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 464.51M | 463.63M | 465.62M | 357.61M | 155.11M | 75.20M | Gross Profit |
| 190.22M | 202.44M | 190.44M | 138.10M | 103.10M | 26.26M | EBIT |
| -36.62M | -37.21M | -243.02M | -56.01M | 16.12M | -37.47M | EBITDA |
| 47.47M | 84.60M | -67.66M | 87.69M | 17.21M | -20.77M | Net Income Common Stockholders |
| -224.11M | -272.43M | -245.47M | -16.95M | -176.33M | -164.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 50.77M | 50.77M | 80.64M | 154.34M | 127.24M | 8.40M | Total Assets |
| 1.46B | 1.46B | 1.76B | 1.86B | 615.87M | 355.10M | Total Debt |
| 597.77M | 597.77M | 621.66M | 483.82M | 190.62M | 58.12M | Net Debt |
| 547.00M | 547.00M | 541.02M | 329.48M | 63.38M | 49.71M | Total Liabilities |
| 889.20M | 889.20M | 928.56M | 839.85M | 465.01M | 186.51M | Stockholders Equity |
| 581.78M | 581.78M | 833.32M | 1.02B | 150.86M | 168.59M |
| Cash Flow | Free Cash Flow | ||||
| -10.26M | -12.44M | -96.66M | -127.78M | 21.74M | -10.84M | Operating Cash Flow |
| 21.05M | 27.16M | -34.16M | -27.78M | 36.51M | 3.57M | Investing Cash Flow |
| -30.25M | -24.15M | -66.50M | -219.63M | -62.25M | 5.24M | Financing Cash Flow |
| -13.07M | -32.89M | 26.96M | 274.51M | 144.57M | -1.50M |
Ayr Wellness Technical Analysis
Negative
0.29
Price Trends
0.60
Negative
1.07
Negative
1.87
Negative
Market Momentum
-0.09
Positive
24.28
Positive
3.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AYR.A, the sentiment is Negative. The current price of 0.29 is below the 20-day moving average (MA) of 0.51, below the 50-day MA of 0.60, and below the 200-day MA of 1.87, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 24.28 is Positive, neither overbought nor oversold. The STOCH value of 3.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AYR.A.
Ayr Wellness Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.28B | 23.21 | 4.19% | ― | 9.46% | 105.27% | |
53 Neutral | $1.09B | ― | -23.33% | ― | 0.67% | 19.14% | |
50 Neutral | $463.40M | ― | -14.00% | ― | -4.99% | 81.69% | |
49 Neutral | $1.13B | ― | -12.12% | ― | 6.27% | 67.62% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
47 Neutral | $183.01M | ― | -18.27% | ― | 7.33% | 84.41% | |
43 Neutral | C$34.36M | ― | -74.75% | ― | -1.02% | 31.66% |
* Healthcare Sector Average
Performance Comparison
TSE:AYR.A
Ayr Wellness
0.29
-1.95
-87.05%
TSE:GTII
Green Thumb Industries
9.73
-5.27
-35.13%
TSE:TRUL
Trulieve Cannabis
6.03
-6.55
-52.07%
TSE:OGI
OrganiGram Holdings
1.42
-1.19
-45.59%
TSE:CURA
Curaleaf Holdings
1.41
-3.85
-73.19%
TSE:CL
Cresco Labs
1.07
-1.05
-49.53%
Ayr Wellness Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -27.50% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Neutral
The call highlighted strategic moves to strengthen the business through operational streamlining and market expansion, particularly in Ohio. However, significant challenges persist, including price compression and various operational difficulties, leading to a decline in profitability and substantial impairment charges.Highlights
Strong Wholesale Revenue Growth
CPG wholesale revenue in 2024 was up 20% year-over-year, with core brands Kynd, Haze, and Later Days up 126% over the prior year.
Ohio Market Expansion
Ohio adult use sales in Q4 contributed to meaningful increases in both retail and wholesale revenues. Ohio retail sales increased 41% quarter-over-quarter.
Operational Streamlining
Efforts to streamline operations include selling assets in Illinois, consolidating facilities in Nevada and Massachusetts, and reducing SG&A costs.
New Indoor Cultivation Facility in Florida
Launch of a new indoor cultivation facility in Ocala, expected to come online in Q2, will more than double current flower production capacity.
Lowlights
Price Compression Across Various Markets
Price compression continued to impact margins, with BDSA flower pricing decreasing sequentially across all markets, ranging from 5% to 12%.
Challenges in Florida
Florida faced price compression, seasonal greenhouse impacts, and inventory challenges stemming from the transition to a new seed-to-sale tracking system.
Q4 Gross Profit Decline
Q4 gross profit of $35.8 million represented a 17% decrease from the prior quarter and a 27% decrease from the prior year.
Impairment Charges
Q4 loss from continuing operations was $133.9 million, driven by $116 million of non-cash impairment charges, including a $94 million goodwill impairment.
Company Guidance
During the Ayr Wellness fourth quarter and full-year 2024 earnings call, Interim CEO Steven Cohen and President George DeNardo discussed the company's strategic focus on sustainable growth and profitability amidst industry challenges. The call highlighted that full-year sales remained flat at $463.6 million compared to the previous year, with retail sales declining by 4% and wholesale sales increasing by 28%. Adjusted gross margin was reported at 51.6%, down from 55% the previous year, primarily due to price compression and a shift in revenue from retail to wholesale. Ayr emphasized its commitment to core markets, including Florida, Ohio, and Pennsylvania, and announced plans to divest non-core assets like those in Illinois. The $10 million CapEx guidance for 2025, excluding potential Virginia investments, reflects a careful approach to capital deployment. Ayr's leadership transition includes the upcoming departure of CFO Brad Asher, with a focus on building a resilient leadership team to drive future success.Ayr Wellness Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
AYR Wellness Promotes George Denardo to President Amidst Strategic Operational Focus
Positive
Jan 27, 2025
AYR Wellness has appointed George Denardo as its new President, promoting him from Chief Operating Officer. This move underscores the company’s recognition of Denardo’s significant contributions to operational improvements and brand portfolio management. As President, Denardo will enhance connectivity and synergy across AYR’s revenue and supply chain functions, aiming to improve efficiency and generate value amidst a challenging cannabis market landscape.
AYR Wellness Faces Challenges Amid Expansion Plans
Nov 13, 2024
AYR Wellness reported a challenging third quarter, affected by economic pressures and increased competition, which impacted revenue despite successful adult-use sales in Ohio. The company is focusing on expanding its operations in key markets such as Ohio, Virginia, and Florida, and aims to enhance its gross margin and operational efficiency to drive future growth.
AYR Wellness Secures New York Cannabis License
Nov 12, 2024
AYR Wellness, a prominent U.S. cannabis operator, has announced that its subsidiary, Amethyst Health, in partnership with Black Star Wellness, has been conditionally awarded a medical cannabis license in New York. This move signals AYR’s strategic expansion into the burgeoning New York cannabis market.
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.