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“[:\/a-zA-Z0-9_\-]+)?(\.[a-zA-Z0-9_\-\/]+)+)" data-type-override="url"> Message Submit Δ Recent Marijuana Stock Analysis Here are the most recent marijuana stock analysis articles: Buy IM Cannabis IMCC Stock For Germany Cannabis Legalization Verano Holdings VRNOF stock…”
MariMed MRMD Stock printed its Q3 financial numbers to very little fanfare; MRMD stock initially sold off. But, on a comparative basis, when you look at the valuation model for the broader stock market, there is a tremendous amount of value packed into MRMD stock. And, while currently cannabis stocks are being pressured by short-sellers, for some of these stocks, this may not be the wisest strategy. The value-packed into some of these stocks is enough that with any positive news release for cannabis stocks, these stocks could go nuclear.
Nonetheless, I do not dwell on stock prices, per se. But, these are undervalued marijuana stocks and, MRMD stock is very undervalued when you look at MariMed’s current and future profitability. Current prices have MRMD stock increasing over 200% at the current valuation.
Until the bigger name cannabis stocks start printing new all-time highs, the stocks that many retail investors rushed in to buy upon cannabis legalization, these retail investors are loath to add in new positions. Because of that, there is no perpetuation of upward movement; short sellers step in.
Undervalued Marijuana Stocks: A buyer’s market
But, think it through… what if all of a sudden these cannabis companies started offering dividends on the profits they are printing? There would be a sudden surge in retirees entering into the fray looking for higher yield to price. And, undervalued Marijuana stocks would be a thing of the past.
But, it is a process. And, while it is an eventuality that valuations will moderate, keep in mind that guy from Omaha, Warren Buffett, who’s made the biggest fortune of all time patiently investing in undervalued stocks. Marijuana stocks are undervalued. Significantly. If you merely compared cannabis stocks to the broader market, you could see that this is absolutely a buyer’s market. While I certainly understand the consternation for investors holding on to these stocks, stocks where valuations are non-sensical comparatively, hopefully, you can also see that this value will inevitably drive the stocks higher, obliterating these short sellers.
My drumbeat will be constant and unwavering. There is value in these pot stocks. Patience is a virtue… that will be well rewarded for those looking for long-term opportunities.
MariMed MRMD Stock Comparison
The stand-outs for the Q3 numbers were the 32% revenue increase QoQ, 38% adjusted EBITDA/Revenue, and MariMed management maintained guidance.
Here are the numbers for comparing the cannabis companies on my Complete List of Top 100 Cannabis companies:
- #21 Market Cap: $235M
- #9 Revenue Growth Rate: 32.3%
- #16 Gross Margins: 54%
- #9 Operating Efficiencies: 34%
- #9 EBITDA/Revenue: 22%
- #13 Cash/Debt Ratio: 54%
- #31 Total Assets: $73M
MariMed continued to perform excellent compared to its counterparts. Despite that, there was a dip in gross margins on a percentage basis despite the big pop upwards in revenue. Outside of the the overall size of the company (Market Cap & Total Assets), MariMed is one of the best companies out there. Period. And, they are about to grow even more significantly.
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MariMed MRMD Stock Financial Data
Here is a breakdown of MariMed Q3 financial data. For a full breakdown of MariMed MRMD stock numbers, visit the MRMD stock page.MRMD stock page.
Strong, continuous growth upwards in revenue was the big theme for MariMed. The 32.3% growth rate was solid. However, despite this, MariMed printed lower gross margins whose affect you can see trickle all the way down the financial statement. Nonetheless, gross profits continuously maintained a slid increase showing a balance between revenue and cost.
Most cannabis companies are seeing a slight slowing in revenue. Overall, cannabis companies increased about 5% for this quarter. This is still solid growth, especially when yo compare that to the broader market which prints all of about 3.5% quarterly.
MariMed expects to meet guidance given at the beginning of the year, but, that means a print of $28M for the upcoming quarter. Cannabis companies have been attributing this to no more stimulus checks to which, I see that as a scapegoat without merit. Bars are opening up again and people are normalizing their lives. This means no more sitting at home getting stoned to death while binging Netflix and Doritos with nothing else to do. I figured this would occur.
Operating costs advanced for the quarter along with revenues. But, on a percentage basis, operating efficiencies also went higher; 34.9% for the quarter. In order to make an omelet, you need to crack some eggs. I expect that new management brought on to the team, along with other costs associated with advancing management’s objectives will pay off.
Still, the 35% is within the same range of the best players in the industry. I look for 30% – 35% as being the standard to achieve. Prior to this, MariMed was well beyond these metrics dipping in to the 20s. I expect operating efficiencies will see these numbers again soon as new stores open and revenues continually increase.
EBTIDA & Net Profits
On an adjusted basis, EBTIDA hit 38% (Unadjusted was 21%). This is about 50% higher than the broader S&P 500 stocks. This means that every dollar in revenue MariMed earns in revenue, they are keeping 50% more from cost of goods and operations, less D&A. Which company would you rather invest in? A company that prints 50% higher in margins, or not? Hopefully, you are always looking to optimize your investment opportunity. Time is money. And, on a percentage basis, MariMed makes more money comparatively.
We are likely to see EBITDA, unadjusted, heading back upwards during future quarters. MariMed is continually looking to expand and get its #1 selling products in more areas, opening more dispensaries, and continually looking towards acquisitions.
While MariMed has been focused on the East Coast, I always try and envision big mergers happening, such as MariMed and maybe 4Front up in Washington State (And others), or Unrivaled who are truly West Coast. Keep these kinds of moves in mind as we will continually see M&A activity ahead.
Cash On Hand
Strengthening its balance sheet on a percentage basis, again, MariMed is one of the better-situated companies with regards to cash on hand. And, with MariMed having net earnings positive, they will continue to add to their capabilities with more and more cash.
I have mentioned many times that cash is king and companies in a positive net earnings position with sufficient cash will begin to outperform others that are lagging behind. This should absolutely be something you need to keep an eye on, cash on hand, and whether there is a burn rate.
Continually, MariMed is adding assets to its balance sheet in order to increase its revenue & profits capabilities and the continuous moves upwards show that management is doing its job.
Shareholder value can be directly correlated to the increase in total equity and net earnings. This upward climb is continuously improving and MariMed’s fortunes will do the same.
MariMed MRMD Stock Activity
Here is a look at MRMD stock:
Notice the move lower on what could easily be described as outstanding revenues for the quarter; there is largely nothing wrong with MRMD stock Q3 financials.
The real story in cannabis stocks right now is the fact that cannabis stocks have not cleared all-time highs, drawing in more and more retail investors looking to capitalize on the upward movements. Because of this, cannabis stocks have softened and this invited in the short-sellers. It becomes a vicious feedback as many of these stocks are clearly profitable, undervalued, and the stocks are being pressured lower.
MariMed MRMD Stock Short Interest
As you can see, lately, short-sellers are back in control. They have pushed daily volumes above the 50% level. Mind you, there will also be individuals exiting their positions, which are sell orders themselves, and these positions would not register. But, it is also balanced by anyone initiating a new position. As you can see from the stock chart above, MRMD stock basically sold off. Short sellers got involved and have pushed the stock further.
But, I think it is entirely risky for anyone to be putting a short position on a company with financials that are so solid. It basically states that the broader market valuation is wrong and that even the valuation on cannabis, by extension, is even more wrong. But, look at the 10-year yield which is sitting at 1.42% and heading lower.
My MariMed MRMD Stock Prediction
As I have been doing with all of the stocks I have on this site, I am putting together forward projections when possible on these stocks. I am using Discounted Cash Flow Statements and forward projections going out 5 years. Below are the projections I used for MariMed (You can see the whole breakdown here whole breakdown here)
I am iterating that MRMD stock is undervalued and based on comparative company valuations in the broader market, interest rates, inflation projections, and growth potential for MariMed, MRMD stock should be valued at approximately $2.21 right now and will continue beyond that over the following 5-year period.
Is MariMed MRMD Stock a Good Investment?
MariMed is one of my Top Picks of marijuana stocks to buy now for very good reason: They are one of the best-performing pot stocks there is. Period. Is MRMD stock a good investment? This becomes a philosophical question where you have to ask if the broader market, based upon inflation, interest rates, and growth potential is valued properly. If you agree with the current valuations of all other stocks, then, on a comparative basis, MRMD is a significantly undervalued pot stock to buy now
Growth is there and will continue to be there. MariMed is profitable and profits are expanding. And, with regard to inflation and interest rates, there does not seem to be much of a potential change there. These metrics assure me that MariMed MRMD stock should push much higher and it is merely a matter of a long-term process until everything falls into place.
MariMed stock will go higher; they are one of the best cannabis companies out there.
Looking for MariMed MRMD stock Previous Analysis
- MariMed MRMD Stock Forecast & Analysis
- MariMed MRMD Stock Targeting Large Upside move with continued growth
- MariMed MRMD Stock Much Higher Than I Originally Thought
- MariMed Prints Big Revenue Increase; MRMD Stock to $8.30
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Recent Marijuana Stock Analysis
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