Jushi Beats All Expectations: Cannabis Company Surpasses Analysts' 4Q23 Sales And Profit Forecasts

The multi-state cannabis company Jushi Holdings JUSHF, reported a significant increase in unique patient visits in Virginia, indicating robust growth in the fourth quarter of 2023.

Sales reached $67.8 million, exceeding the FactSet consensus of $65.3 million, while adjusted EBITDA stood at $11.3 million surpassing the expected $10.5 million.

Jushi outperformed financial experts' expectations in both sales and profits, noted analyst Pablo Zuanic from Zuanic & Associates in a recent equity research report.

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Financial Health And Market Position

Despite challenges, Jushi's balance sheet remains manageable, with a notable improvement in free cash flow trends achieving break-even levels in 3Q23 and 4Q23.

The company aims to handle its $55 million debt due by December 2024 through non-dilutive strategies, ensuring that current shareholders' value remains unaffected.

Currently, the stock trades at 1.5x CY24 EV/Sales, which, according to Zuanic, does not fully account for the potential growth from Pennsylvania and Virginia moving to recreational cannabis sales.

Regulatory Landscape And Expansion Potential

The report also delves into the state regulatory outlook, especially focusing on Ohio, Pennsylvania, and Virginia, where about 70% of the company's stores are located.

Virginia is on the verge of starting recreational sales by May 1, 2025, pending the Governor's approval.

Meanwhile, Pennsylvania is progressing with bipartisan bills, aiming to finalize recreational sales legislation by June 30 and Ohio is anticipated to begin recreational sales in 4Q24, offering Jushi additional expansion opportunities.

Market Dynamics And Valuation

Jushi shares experienced a 22% decline over the last 30 days, attributed to regulatory news flow and market dynamics.

However, Zuanic believes the stock will perform better than the average return of other stocks in the same sector or industry and maintains an Overweight stance, citing its underappreciated market valuation and significant upside potential from its operations in Pennsylvania and Virginia.

Despite current market volatility, Jushi's strategic positioning and financial health suggest a promising outlook for investors.

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