Jushi Holdings JUSHF Stock Forecast & Analysis

Jushi Holdings; JUSHF stock, is one of my top picks – Best Cannabis Stocks To Buy and I wanted to put together the JUSHF stock forecast & analysis.  This is a company that is growing rapidly via organic growth and acquisitions.  Jushi Holdings has just completed two acquisitions including The Apothecarium and NuLeaf, both in Nevada.  And, Jushi Holdings just announced the opening of its 33rd dispensary with more planned opening soon.

When I put together the JUSHF stock forecast, I started with analyst expectations for the next couple of year with revenues, and then built in increasing EBITDA/Revenue metrics.  The end result is a company that has some ~195M outstanding shares.  But, at this point they will be hitting some $1B in revenue in approximately 5 years’ time.  That represents about $5.50 in revenue per share.

At that level, with a modest 7.50% EPS of revenue; ~$0.41, you are looking at the ability to buy that future EPS for about $1.52 at the time of this writing.  That is about 27% future yield in the fifth year.  While Jushi Holdings is nearing Net Earnings profitable as of right now, the rate will be continually increasing from where they are now.

Ratios and Value Investing

An investor would be hard pressed to find alternative investments yielding this growth rate and that high of a future yield.  Granted, Jushi Holdings needs to grow into this.  But, if you were to compare this kind of future yield with other stocks right now, this puts JUSHF stock at the top of the heap.

And, of course, investor sentiment for cannabis stocks remains very low.  That is the opportunity for astute and patient investors.

If you compared other investments right now to the future potential in a cannabis stock the growth rates do not come close to comparison.  Then, when you factor the trajectory of revenue/share from this starting point, along with the price of the stock, and you look at the growth rates with revenue, increases in margins, and profits, for long term investors in it for the long haul will be very well rewarded as JUSHF stock launches.

Growth Stocks & The Slingshot Effect

The foundation that Jushi Holdings is building today will be a powerhouse opportunity in the future.

And, along the way, cannabis federal legalization is going to occur.  And, up-listing to Nasdaq is going to occur.  And, deep-pocket investors are going to show up.  But, right now, JUSHF stock is sitting at a nadir that has far more upside potential than down.

The markets are not going to ignore profits forever. And, savvy investors looking for long term growth in an environment when the stock market just took nearly 2 years’ worth of value away in five months will encourage investors to get to work and look more broadly at opportunities.

I see this as big potential opportunity for cannabis stocks.

Jushi Holdings Financial Data

Here is the analysis on the latest data for Jushi Holdings.  Note, there will be continued increases coming up as accretive acquisitions start to show up in the numbers.

Jushi Holdings Gross Profits

  • Jushi Holdings Revenue

Revenue dropped slightly QoQ.  That is the story for a big chunk of cannabis stocks as headwinds saw declines in revenues.  Those headwinds, some of which are inflation, dropped Jushi Holdings revenue slightly.

Gross margins, however, improved slightly.  And, by extension, so did gross profits.  There was a substantial drop in cost of goods.  As management stated in its latest earnings conference call this was attributed to working with vendors and renegotiating costs.

The increase in gross margins will hopefully be more consistent and there are improvements from here.

Jushi Holdings Operating Profits

  • Jushi Holdings Operating Costs

Operating efficiencies, the ratio of operating costs over total revenues, is still at 60%.  This is where the real gains need to take place despite there being small gains this quarter.  With revenue at just above $61M and operating costs at this high of a level, cost cutting could do well.

First, the ultimate target should be 17.5% operating efficiencies.  Currently, operating costs are approximately  for the quarter.  If this were to remain flat line, and revenues increased to $250M per quarter, Jushi Holdings operating efficiencies would come in at the 17.5% level that the broader market is hitting.

Companies need to grow into their operating costs.  A publicly traded company would need a certain amount of operating costs to function.  But, it is not necessary to go full Canopy Growth.

Given this as the model, Jushi Holdings will be hitting the $250M per quarter level in the next 5 years.  And, if operating costs can be contained then operating efficiencies will be at levels that are competitive.

Jushi Holdings management is focusing on this aspect.  The eventuality is JUSHF stock powering higher as profits increase.

Jushi Holdings EBITDA & Net Profits

  • Jushi Holdings EBITDA

Being just on the cusp of profitability allows for a lot of potential in a growth stock such as JUSHF stock.  The real focus for me is going to be the revenue growth accompanied by cost controls with operating costs.  Jushi has a well established corporate structure.  Now, Jushi Holdings needs to scale up its business with even more dispensaries in states they are in, as well as expanding into new states.

By scaling up, Jushi Holdings can grow into its corporate structure allowing for improved operating efficiencies which, that will trickle downward to EBITDA profits and then eventually net earnings profitability.

Jushi Holdings Cash On Hand

  • Jushi Holdings Cash on Hand

There is ample working capital and access to capital for Jushi Holdings.  And, I expect there will be a significant decrease in cash burn, which is already fairly low on a per revenue basis.  Sufficient capital and access allows for a company to breathe and grow.

Jushi Holdings looks to position itself into a market leader by increasing dispensary count significantly.  Having a solid capital structure to include cash and total equity, this positions Jushi Holdings to be able to expand.  When you look at a company that is growing versus a company that is stuck, such as Canopy Growth who cannot seem to grow at all, you can start to see how this differentiation determines the future opportunity for a stock such as JUSHF stock.

Jushi Holdings Total Equity

  • Jushi Holdings Total Assets

Look for solid, increasing total equity in the coming quarters.  I am not certain we have seen 100% of the inclusion of the latest acquisitions for by Jushi Holdings.  Therefore, there may be incremental increases in total equity.  Further, there are now the additional dispensaries just announced and, this will add to total equity.

By opening new dispensaries, these are revenue generators as they will be where consumers go to buy product.  Therefore, as the quarters pass, consumers grow to rely upon Jushi Holdings dispensaries as their go-to for getting product, this becomes a valuable asset over time.  There were an approximate 20% more dispensaries added to Jushi Holdings portfolio which, if this is linear will translate into 20% increase in total equity; all else equal.

Jushi Holdings JUSHF Stock Forecast

Jushi Holdings JUSHF Stock DCF

With these DCFs, you constantly need to adjust for many things.  First, there is the date.  Next, interest rates.  And, margins are continuously being shifted.  This means that discovering intrinsic value is a continuous, ongoing effort.   I have had to shift my numbers accordingly.

The next several years have Jushi Holdings growing in revenue.  The new dispensaries are going to continue increasing the potential for this.  Jushi Holdings is at 33 dispensaries and, this number will continue to climb.

There will be continued growth in margins along the way.  I incorporated this into the JUSHF stock forecast & analysis, growing the metrics on an increasing basis over the next several years.

Jushi Management has shown they are committed to containing costs and, that will start to show up in the bottom line.

I fully expect that Jushi Holdings will make other M&A moves and acquire other cannabis companies.  This will alter and shift the share count and future revenue.

I will update the JUSHF stock forecast & analysis over the course of the next few quarters as we get more information.

Is Jushi Holdings JUSHF Stock A Good Investment?

Jushi Holdings JUSHF Stock Chart 28Nov22

We have been told far too many times that cannabis federal legalization is likely to see some movement very soon.  Congress is back in session right now and it is possible that something happens this week.  Be prepared.

Regardless of this week’s potential, I also, simultaneously believe that Biden will simply reschedule cannabis below Schedule I, which immediately makes cannabis no longer an illegal product.

For now, we have been promised something coming from the Senate and that it will hit before then end of this month.  That is Wednesday.  Should the Senate drop something, no one on the planet will be able to hit the buy button fast enough… certainly not the short sellers.  Offers will evaporate all the way up for sell orders and immediately, JUSHF stock will print very high numbers.  This is something that is likely to occur across the board with all cannabis stocks.  But, the Senate dropping something is not an absolute certainty.  I have said this before, I believe Biden and his administration’s work has a far, far bigger probability event.  Still, if the Senate and congress can get something done, something prior to the December 15th closing of this Congress, would be far, far more icing on the cake.

I believe that Jushi Holdings JUSHF stock has a lot of upside potential in a landscape of cannabis federal legalization.  Jushi Holdings, to me, remains a solid long term growth story.  Management is executing its plan well.  Jushi Holdings is on a solid foundation and I expect significant organic growth from this point.  If this continues, look for solid revenue gains to be accompanied by increasing economies of scale, improving gross margins & gross profits, continued improving operating efficiencies and all of that flowing to the bottom line.

I think Jushi Holding – JUSHF stock, is a solid long term opportunity for anyone looking to participate in the cannabis growth story.

Jushi Holdings Financial Statements

Jushi Holdings JUSHF Stock Financial Statements

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright Cannabis Investing Newsletter 2021 - 2022