Post by
JustBTFD on Jun 17, 2019 1:36pm
>90% upside in SP
The way I am looking at the stock (comfortably $0.55/share, upside to $1.60/share):
- I am running my model on run rate 2019 numbers assuming they have 12 stores operational by year-end. These are management projections.
- I model the Red Deer location based on current projections of $4.5 million in revenue per annum and a 26% margin
- The two operational Sweet Tree locations at $860k in store level cash flow per annum
- The remaining 9 locations at $3 million in sales per store per annum at 25% margin (margins are likely closer to 30-35% when looking at comparables). I beleive these numbers are conservative as stores haven't even had inventory to sell and their future locations are not in saturated markets (High River, Llyodminster, Vegreville)
- I assume full exercise of all additional shares including the full sliding scale contigent of 53.8 million shares (as I don't have details on the scale, I have left revenue at run rate level for the two Sweet Tree stores - very conservative as the shares wouldn't be issued if that was the case)
- Does not include any upside for additional stores aside from the 12 that are either operational or awaiting licenses. They have 15 other locations, 6 of which will be finished constructed in the next 3 months. Again, I haven't included ANY value for these locations
- I have cash balance of $13.4 million (assuming NBF exercises their warrants)
- Annual G&A burn of $3.2 million
- I assume a 10x CF multiple - most peers would be double or triple that
- This puts me at $0.53 per share at my conservative case
- My bull case which includes slghtly higher margins, reduced cash balance and 15 additional stores in operation puts the stock over $1.60 per share
- Imagine what it would trade at if it was priced at traditional marijuana multiples...
Comment by
AHRBull on Jun 17, 2019 3:38pm
$0,53 is way to conservative. with aglc granting the licences, this stock will fly. it tradet last year in the range $2,50 (after consolidation). before aglc put out the temp. stop. now yss is trading $0,33, while fundamentals improvet so much. its all about the aglc licence.
Comment by
AHRBull on Jun 17, 2019 5:04pm
$1 seems like a first reasonable stock price target to ketch the peer group
Comment by
not2old4this on Jun 17, 2019 8:38pm
I'd not be surprised, with the connections management has, if they haven't been in some talks for institutional investment to happen not long after this consolidation. I'm excited for this one.