Trulieve Reaffirms 2020 Guidance Despite Pandemic, Analyst Says Florida Cannabis Company's Valuation 'Attractive'

Trulieve Cannabis Corp. TRUL TCNNF said Wednesday that its revenue rose 13% quarter-over-quarter to $79.7 million in the fourth quarter of 2019. 

The Florida-based company posted an adjusted EBITDA of $45 million in the fourth quarter versus $36.9 million in the third. 

In 2019, the company generated total revenue of $252.8 million and adjusted EBITDA of $132.5 million, up year-over-year from $102.8 million and $51.2 million, respectively, in 2018.

Trulieve's net income for the quarter amounted to $45.5 million, while for the full year it reached $178 million.

"Our fourth quarter results reflect our strong brand and customer loyalty, which were key factors in our success for the year," CEO Kim Rivers said in a statement. 

"We continued to grow our footprint in Florida and made significant strides building out the infrastructure needed to maximize efficiencies and achieve economies of scale."

Despite the COVID-19 outbreak and economic uncertainty, Trulieve expects to see strong medical cannabis demand in its target markets and continues to maintain 50% market share in Florida, the CEO said. 

"Our solid foundation and cash position enable us to monitor opportunities that meet our disciplined criteria and we remain optimistic about expansion in 2020," she said.

The cannabis company reaffirmed its 2020 guidance for revenue in the range of $380 million to $400 million and adjusted EBITDA of $140 million to $160 million.

Trulieve Analyst Reacts To Q4 Print 

While sales were in line with consensus estimates, they were below Cantor Fitzgerald's $84.9-million expectation, analyst Pablo Zuanic said in a Wednesday note.

EBITDA was 40% higher than the consensus estimate, the analyst said. 

Trulieve should discuss the questions of “price competition in 4Q, mix, and better differentiate equivalent price per pound between flower and other products,” he said. 

Zuanic said he's hoping to learn more about the company’s plans for “beachheads” in Massachusetts, Connecticut and California, and whether Trulieve is considering investing there more vigorously.   

Trulieve reaffirmed its guidance during a time when other companies have been withdrawing their projections, the analyst said. 

“We continue to think the valuation is attractive." 

Cantor Fitzgerald reiterated an Overweight rating on Trulieve with a $32 price target. 

TCNNF Price Action

Trulieve shares were down 1.6% at $9.69 at the time of publication Wednesday. 

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Photo courtesy of Trulieve.