The Cannabist Company Holdings Inc. (OTCQX:CBSTF) is a prominent player in the U.S. cannabis industry, involved in cultivation, manufacturing, and retailing of cannabis products.
Despite its strong market presence, the company recently reported disappointing financial results for Q4 and the full year of 2024. The earnings per share (EPS) was -$0.34, significantly missing the estimated EPS of -$0.04. CBSTF's revenue for the period was $96.1 million, falling short of the expected $109.8 million.
This shortfall in revenue and earnings reflects broader financial challenges. The company's price-to-earnings (P/E) ratio is -0.17, indicating negative earnings relative to its share price. This suggests that the company is currently not profitable, which can be concerning for investors. The company's financial ratios further highlight its challenges. The price-to-sales ratio of 0.042 suggests that the market values CBSTF's sales at a fraction of its current share price.
Additionally, the enterprise value to sales ratio is 0.95, indicating that the company's total valuation is nearly equal to its sales, which may not be attractive to investors looking for growth. CBSTF's liquidity and financial health are also under scrutiny. The current ratio of 0.92 indicates potential difficulties in covering short-term liabilities with current assets. Moreover, the debt-to-equity ratio is alarmingly high at 19.26, suggesting a heavy reliance on debt financing.
This could pose risks if the company faces challenges in meeting its debt obligations. The company's earnings yield is -5.95%, highlighting a negative return on investment from earnings. This, combined with an enterprise value to operating cash flow ratio of -25.84, indicates significant challenges in generating cash flow from operations. These financial metrics suggest that CBSTF needs to address its operational and financial strategies to improve its performance and investor confidence.
