Curaleaf stock is leading the cannabis sector higher on Thursday after Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF) posted a lower than the estimated loss for the third quarter.
Investors Cheer Q3 Results
After the legalization of recreational marijuana in Canada last year, the stocks of most marijuana companies started flying, and most of those reached their peaks during the first quarter of 2019. However, it has been a tough time since then, and in that regard, Canadian marijuana company Curaleaf Holdings has not been an exception. However, the company released its financial results for the third quarter, which topped analysts’ estimates.
In the third quarter, Curaleaf generated total revenue of $61.8 million, which reflects a rise of 27% from the previous quarter. On a year-on-year basis, the third quarter revenue reflects a threefold rise. The company is quite actively involved in the retail space, despite being a wholesale supplier as well. Curaleaf Holdings revealed that the total sales generated from the retail and wholesale operations combined stood at $51 million. That reflects a rise of 34% from the previous quarter.
The results impressed the market, and Curaleaf stock surged by as much as 9% to $7.95 CAD as a result.
In addition to all that, Curaleaf managed to improve its gross margins to 47% from 40% in Q2; however, in the year-ago period, gross margins stood at 55%.
Analysts were estimating the company to report a loss of 2 cents a share on revenue of $61.80 million.
The net losses for the period stood at $6.8 million or losses of $0.01 per share, which is significantly lower than the $24.5 million in losses that the company had suffered in Q2. In the third quarter, the company definitely showed that it is on the right path with regard to incremental improvement.
In a press release, Curaleaf Holdings stated that it is working towards better operational management and wiser allocation of capital to further improve the business. Investors must also be looking forward to the acquisition of Cura Partner in a deal worth almost $1 billion. That deal is currently pending.
Curaleaf stock is up about 15% so far in 2019.
Featured image: Canva