Hedgeye CEO Keith McCullough is adding Trulieve Cannabis (TCNNF) to the long side of Investing Ideas. Below is a brief note.
I've been waiting, patiently, for a pullback in some of Howard Penney's favorite Long Cannabis ideas. We're getting one in Trulieve Cannabis (TCNNF) in the past few days...
Here's Consumables analyst Howard Penney's recent recap from his Consumables Pro product on the name:
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Trulieve Q3 Earnings (TCNNF) TCNNF is on the Hedgeye Best Idea list as a long and posted a very strong 3Q20. Trulieve had a record quarterly revenue of $136.3 million, representing a sequential QoQ of 13% and a 93% increase YoY. Unaudited pro forma revenue, which includes PurePenn and Solevo and assumed the acquisitions had occurred on January 1, 2020, would have been $154.9 million for the current quarter and $392 million for the nine months ended September 30. In 3Q20, the shift to GAAP may be causing some differences to consensus numbers, but under GAAP, TCNNF had a gross margin of 75%. Operating income for the company was $43.4 million in 3Q20 compared to $37.5 million last quarter. Net income was $4.7 million for the third quarter compared to $6.6 million in Q2, resulting in EPS of $0.04. Under IFRS, for net income and EPS, it's important to note that if the fair value impact of biological assets and the revaluation of debt warrants were excluded, net income would increase to $33.3 million for the third quarter compared to $28.4 million in Q2, resulting in EPS of $0.30. Under GAAP, the fair value impact of biological assets accounting goes away, but the debt warrants' revaluation will remain. Under GAAP, net income was $17.4 million, resulting in EPS of $0.15 on a fully diluted basis. |
Buyem on red,
KM
