Trulieve Cannabis (TRLV) Opens In Dunwoody, Is It Still 33% Below Fair Value?
Trulieve Cannabis (TRLV) recently opened a new medical cannabis dispensary in Dunwoody, Georgia, giving investors a fresh data point on the company’s expansion into the metro Atlanta patient market.
The Dunwoody opening comes after a recent US$55.5 million shelf registration closure in August, and it lands at a time when Trulieve Cannabis has seen a 43.48% 1 month share price return and a 59.76% 1 year total shareholder return, suggesting momentum has picked up after a mixed longer term record.
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Bulls point to Trulieve Cannabis expanding in Georgia and a recent US$55.5 million capital raise as support for the current share price momentum. Bears focus on ongoing losses and revenue contraction. Which side does the valuation support next?
Most Popular Narrative: 33.4% Undervalued
Against the last close of $12.11, the most followed narrative on Trulieve Cannabis points to a fair value of $18.18. This frames the recent Georgia expansion against a longer term earnings story.
A strong cash position of US$353 million against US$290 million in debt and positive free cash flow of US$42 million in the quarter provide room to fund new stores, production upgrades and possible acquisitions, which can influence future revenue and earnings power.
This raises the question of what kind of revenue path and margin shift would need to sit behind that fair value for Trulieve Cannabis. The narrative leans on a sizeable swing in profitability, a re rating in the future earnings multiple and a specific view on how federal rescheduling feeds into those cash flows.
Result: Fair Value of $18.18 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that upside story for Trulieve Cannabis can be knocked off course if federal rescheduling delivers less tax relief than expected, or if patient growth in Georgia and Texas underwhelms.
Find out about the key risks to this Trulieve Cannabis narrative.
Next Steps
With both risks and rewards in focus for Trulieve Cannabis, it makes sense to act promptly and test the numbers yourself against your own expectations. To weigh those trade offs and judge the balance of caution and optimism, review the 3 key rewards and 2 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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