Trulieve Cannabis Corp: Staggering Financial Growth Will Drive Share Price Higher

TCNNF Stock

Tremendous Opportunity With This Mid-Cap Pot Stock

Marijuana stocks have undergone a major pullback since “Reddit” traders drove up the sector in spectacular fashion in February.

But while the spike in the marijuana stock market was incredible to watch, there was no basis for the buying, other than the Reddit frenzy. Longer-term, I like the developments in the U.S. marijuana segment, where more states are jumping aboard the legalization trend, which I expect to continue.

A mid-cap U.S. pot player with the potential to return strong capital appreciation is Trulieve Cannabis Corp (CNSX:TRUL, OTCMKTS:TCNNF), a vertically integrated marijuana company.

Trading around $36.00, TCNNF stock is well below its 52-week high of $53.73, which was reached on March 18. At the moment, I see Trulieve stock as an aggressive risk/reward opportunity for risk capital investors.

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Think Long-Term With TCNNF Stock

The below stock chart shows the recent stalling in shares of Trulieve Cannabis Corp. Prior to the selling after its March 2021 high, Trulieve stock was on an impressive rally from below $6.00 in March 2020.

Along the way, TCNNF stock managed to hold its trendline support on several tests but failed to hold after breaking the trendline support in April.

At this point, the near-term technical picture is neutral as Trulieve stock drifts in a narrow sideways channel looking for support.

Failure to hold could see TCNNF stock move to its 200-day moving average at $35.02 or the $20.00–29.99 range, where I see a great opportunity.

Chart courtesy of StockCharts.com

Sizzling Revenue Growth and Profitability

A look at Trulieve Cannabis Corp’s three-year revenue picture shows tremendous growth so far, with revenues surging by 407% from 2018 to 2020.

The revenue compound annual growth rate (CAGR) was a sizzling 122% during this time as Trulieve aggressively expanded.

Fiscal YearRevenues (Millions)Growth
2018$102.8N/A
2019$252.8145.9%
2020$521.5106.3%

(Source: “Trulieve Cannabis Corp. (TCNNF),” Yahoo! Finance, last accessed June 21, 2021.)

But as you might expect, analysts estimate that Trulieve’s revenue growth rate will soften to more realistic levels.

Nonetheless, the forward growth looks impressive. Trulieve Cannabis Corp is expected to ramp up its revenues by 68.7% to $879.9 million this year and by 42.7% to $1.3 billion in 2022. (Source: Ibid.)

Along the way, Trulieve delivered earnings before interest, taxes, depreciation, and amortization (EBITDA) income.

Fiscal YearEBITDA (Millions)Growth
2018$78.4N/A
2019$302.5285.8%
2020$207.9-31.3%

(Source: Ibid.)

Trulieve Cannabis Corp also delivered generally accepted accounting principles (GAAP) earnings-per-share (EPS) profits in the past three years.

Fiscal YearGAAP Diluted EPSGrowth
2018$0.42N/A
2019$1.54266.7%
2020$0.53-65.6%

(Source: Ibid.)

While Trulieve reported an EPS decline in 2020, the company’s outlook is positive, calling for a rebound to $1.16 per diluted share this year, followed by $1.66 in 2022. (Source: Ibid.)

Analyst Take

The strong tailwinds in the U.S. marijuana segment have been benefiting Trulieve Cannabis Corp, as reflected in the company’s revenue and earnings growth.

Trulieve stock is set for some spectacular growth. Given the recent pullback in price, this may be a good opportunity to jump in.