Trulieve Cannabis (NYSE:TRLV) Announces Earnings Results, Hits Expectations

Key Points

• Trulieve reported EPS of $0.09, matching analyst expectations. Third-quarter revenue rose 4% year over year to $230 million, with adjusted EBITDA of $89 million and operating cash flow of $74 million.
• Schedule III rescheduling has enabled DEA registration for Trulieve’s medical operations and is expected to remove the 280E tax burden going forward. However, the company’s tax position involving 2019 onward—including more than $102 million in IRS refunds received—remains unresolved.
• Management expects fourth-quarter revenue to increase by a low single-digit percentage. Georgia patient enrollment has topped 60,000, and two additional dispensaries were approved; Texas may offer further growth pending final licensure.

Trulieve Cannabis (NYSE:TRLV - Get Free Report) released its quarterly earnings data on Thursday. The company reported $0.09 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.09, Zacks reports. Trulieve Cannabis had a negative return on equity of 4.24% and a negative net margin of 41.55%.

Here are the key takeaways from Trulieve Cannabis' conference call:

• Trulieve reported third-quarter revenue of $230 million, up 4% year over year and sequentially, with a 64% gross margin and $89 million in adjusted EBITDA (39% margin). Operating cash flow was $74 million.
• Rescheduling of state-licensed medical cannabis to Schedule III has enabled DEA registration for Trulieve’s medical operations, removal of the 280E tax burden going forward, and its NYSE listing. Management says these changes are improving access to investors and potential business partners.
• Georgia demand is growing faster than the company initially expected: patient enrollment topped 60,000, and Trulieve received approval for two more dispensaries. The company is adding production capacity; Texas could provide another growth opportunity, pending final licensure.
• Trulieve expects fourth-quarter revenue to rise by a low single-digit percentage, with gross margin comparable to recent quarters but some pressure from holiday promotions. It anticipates a reported net loss because of non-cash purchase-accounting adjustments related to its Harvest investment.
• Although the company says 280E will not apply to its Schedule III medical operations going forward, it still carries an uncertain tax position covering 2019 to the present, including more than $102 million in IRS refunds received and related interest. The position remains unresolved.

Trulieve Cannabis Stock Performance

Shares of NYSE TRLV traded down $0.65 during mid-day trading on Thursday, reaching $10.95. 1,493,260 shares of the company traded hands, compared to its average volume of 1,293,669. The company has a debt-to-equity ratio of 0.45, a quick ratio of 3.98 and a current ratio of 5.94. The company's fifty day moving average is $11.20. Trulieve Cannabis has a fifty-two week low of $4.62 and a fifty-two week high of $13.28.

Analyst Ratings Changes

TRLV has been the subject of a number of recent research reports. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Trulieve Cannabis in a research note on Friday, September 11th. Wall Street Zen cut Trulieve Cannabis from a "buy" rating to a "hold" rating in a research note on Saturday, August 8th. Finally, Cantor Fitzgerald restated an "overweight" rating and issued a $15.00 price objective on shares of Trulieve Cannabis in a report on Monday. One analyst has rated the stock with a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has a consensus rating of "Hold" and an average target price of $15.00.

Trulieve Cannabis Company Profile

Trulieve Cannabis Corp. is a vertically integrated cannabis company that cultivates, processes and sells medical and adult-use cannabis products. Its offerings include flower, pre-rolls, concentrates, vaporizers, edibles, tinctures, capsules and topical products, sold through retail dispensaries and other approved channels under brands such as Trulieve, Cultivar Collection, Muse, Roll One and Alchemy.

Founded in 2015, Trulieve initially built its business around Florida's medical cannabis market and later expanded into additional U.S.

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