Up until March and April, many marijuana stocks experienced excellent rallies that saw them reach record highs and Green Thumb Industries (CSE:GTII) (OTCQX:GTBIF) was certainly one of them. Back in April, GTBIF stock gained in excess of 100% from the start of the year, but since then it has given up most of those gains.
Late yesterday, Green Thumb Industries announced its Q2 2019 financial results and the report seems to have had a positive effect on the stock. Like many other companies, Green Thumb managed to record hugely impressive growth in its revenues year-on-year.
Revenue Jumps 228% YOY
The revenues for the quarter hit $44.7 million, which clocked a year-on-year rise of 228% and more importantly, it managed to beat the analysts’ estimate of $38.9 million comfortably. The worrying factor for the company is that its net losses for the quarter ballooned to $22.2 million, which reflected loss per share of $0.12. In the prior-year period, the company had actually made a profit of $392,888.
Moreover, the losses outstripped the losses of $0.04 per share that had been estimated by Wall Street analysts. The losses after EBITDA stood at $5 million and it is a significant jump from Green Thumb Industries’ loss of only $0.4 million in the previous quarter.
GTBIF stock is up over 5% and now trading at $9.26. On the Canadian stock, GTII stock is trading higher by 3% at $12.26.
The company managed to grow its sales considerably in the quarter, but at the same time, Green Thumb’s expenses spiraled out of control this quarter. On the other hand, the drop in the value of a receivable note also resulted in a massive swing.
In the previous quarter, the company added $34.5 million to its other income overhead; in the second quarter, this turned into a $12.3 million expense. That being said, the company has made a range of strategic acquisitions over the past months that should have a positive effect on its revenues going forward.
However, it will always be at the back of investors' minds that despite the company’s rapid growth, GTBIF stock has underperformed so far this year.
Featured image: Canva