Fire & Flower has a big upside, says PI FinancialLINK
https://www.cantechletter.com/2022/12/fire-flower-has-a-big-upside-says-pi-financial/# The picture appears to be improving for Fire & Flower , according to PI Financial analyst Jason Zandberg, who delivered a report to clients on Wednesday. Zandberg reviewed the latest quarterly numbers from FAF and reiterated a “Buy” rating, saying while earnings are still a work in progress, topline growth looks good on the Canadian cannabis retailer.
................... “When we dig into the same-store sales growth (SSSG) figures from the last three years we see an interesting trend that points to an improving sales picture that began in Q1/22. In 2022, SSSG has progressively gotten better and while the growth figures are still negative, the trend would suggest a positive SSSG for next quarter,” Zandberg wrote.
Zandberg noted opex costs for FAF were down to $15.6 million compared to $16.9 million for the previous quarter and dropped as a percentage of revenue to 36 per cent from 42 per cent. But the analyst maintained that further opex trimming will be needed in future quarters for the company to hit positive adjusted EBITDA.
With the update and retained “Buy” rating, Zandberg also kept his target price at $5.50 per share, representing a projected one-year return at the time of publication of 366 per cent.
“FAF’s Q3 reported financials have not changed our forecasts materially but has instead provided us with greater conviction that the macro factors in the Canadian cannabis retail landscape are improving,” Zandberg said.