Q: Can I get your view on SNDL? (Sundial)
5i Research Answer:
SNDL has held up better than many in the cannabis collapse, 'only' down 13% this year. Sales continue to grow, but it is still losing money (profitability is expected in 2024). Cash flow has been negative. The balance sheet is OK with a bit of net cash. Insiders do not own much. It has missed estimates in five straight quarters, and in 2Q a large loss was reported over expected break even. While we would consider it 'better than most' in the sector, its small size and low cash flow, along with a still-very-uncertain sector backdrop, make it hard for us to recommend this.