Numbers don't lie, and the numbers for Greenlane Holdings (NASDAQ: GNLN) are telling a story of a company in a challenging position. Operating in the Consumer Defensive sector as a distributor, Greenlane's
fundamentals have been under pressure, reflected in its recent downtrend. The company reported a total revenue of $137.1M, but with total operating expenses of $81.4M and other operating expenses of $193.5M, it's clear that the company is struggling to turn a profit. This is further evidenced by the reported loss before tax of $125.9M. Despite a forward PE of 185.19, the company's current valuation stands at a mere $4.32M, suggesting that the market is not optimistic about its
future prospects. Currently, Greenlane Holdings' Working Capital remains stable compared to the previous year. As of December 14, 2023, the Long Term Debt to Equity ratio is projected to increase to 0.20, while the Net Income Per Employee is expected to decrease to $819.4K. Greenlane Holdings is set to announce its earnings today, with the next financial report anticipated on April 1, 2024. While some concerns are arising in the distribution space, it is prudent to review Greenlane Holdings based on its current fundamental data. The company's current risk of financial distress exceeds 58%. The question remains: Are Greenlane Holdings' insiders still optimistic?
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Greenlane Holdings income statement, its balance sheet, and the statement of cash flows. Potential Greenlane Holdings investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Greenlane Holdings investors may use each financial statement separately, they are all related. The changes in Greenlane Holdings's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Greenlane Holdings's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Greenlane Holdings
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Greenlane Holdings performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Greenlane Holdings shares is the value that is considered the true value of the share. If
the intrinsic value of Greenlane is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Greenlane Holdings. Please read more on our
fundamental analysis page.
How effective is Greenlane Holdings in utilizing its assets?
Greenlane Holdings reports assets on its Balance Sheet. It represents the amount of Greenlane resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Greenlane Holdings aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Distributors space. To get a better handle on how balance sheet or income statements item affect Greenlane volatility, please check the breakdown of all its
fundamentals.
Are Greenlane Holdings Earnings Expected to grow?
The
future earnings power of Greenlane Holdings involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Greenlane Holdings factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Greenlane Holdings
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Greenlane
expected earnings.
Greenlane Holdings Gross Profit
Greenlane Holdings Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Greenlane Holdings previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Greenlane Holdings Gross Profit growth over the last 10 years. Please check Greenlane Holdings'
gross profit and other
fundamental indicators for more details.
An Additional Perspective On Greenlane Holdings
The firm reported the previous year's revenue of 137.09
M. Net Loss for the year was (125.86
M) with profit before overhead, payroll, taxes, and interest of 27.68
M.
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Greenlane Holdings' decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Greenlane Holdings' decisions due to their larger holdings.
| 2022 | 2023 (projected) |
Long Term Debt to Equity | 0.14 | 0.2 | Interest Coverage | 9.06 | 9.01 |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Greenlane Holdings has an asset utilization ratio of 93.86 percent. This suggests that the company is making $0.94 for each dollar of assets. An increasing asset utilization means that Greenlane Holdings is more efficient with each dollar of assets it utilizes for everyday operations.
| Current Assets87.9 M | Assets Non Current67.6 M | Goodwill46.9 M |
| Current Assets | 87.93 Million | 43.44 |
| Assets Non Current | 67.61 Million | 33.4 |
| Goodwill | 46.88 Million | 23.16 |
Every cloud has a silver lining, but it's hard to find one in the recent downtrend of Greenlane Holdings (GNLN). Despite a current ratio of 1.65X, indicating a healthy short-term liquidity position, the company's
fundamentals reveal a different story. The company reported a significant operating loss of $56.4M and a net income loss of $110.96 per share. This is further compounded by a negative return on assets of 0.13, suggesting inefficiency in using its assets to generate earnings. The company's total debt stands at $19.8M, with a debt to equity ratio of 0.10%, indicating a relatively low level of indebtedness. However, with a free cash flow of -$29.2M, the company's ability to pay off its short-term obligations or invest in growth opportunities is questionable. Despite these challenges, the company's shares are owned by institutions at 18.71%, suggesting some level of confidence in its long-term prospects.
Our Greenlane analysis suggests possible reversion in January
Our recent analysis of Greenlane Holdings suggests a potential shift in the stock's price trajectory this January. The stock's skewness has recently decreased to -0.11, a statistical measure that often indicates an impending price drop. This negative skewness implies that the returns are skewed to the left, indicating a higher likelihood of negative returns than positive ones. We advise investors to exercise caution and closely monitor the stock in the upcoming weeks. Greenlane Holdings displays very low volatility, with a skewness of -0.11 and a kurtosis of 1.16. However, we recommend investors to further examine Greenlane Holdings' technical indicators to ensure all market information is accessible and reliable. Greenlane Holdings could potentially be classified as a penny stock. While Greenlane Holdings may indeed be a viable investment, many penny stocks are speculative and subject to artificial price inflation. We urge investors to fully understand the potential upside and downside risks of investing in Greenlane Holdings. Investors should be on the lookout for red flags such as email spam, message board hype, claims of breakthroughs, sudden increases in volume, unexpected news releases, unreported promotions, or demotions released prior to SEC filings. We also recommend checking the biographies and employment history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with a microcap classification.
While it is possible to profit from Greenlane Holdings if you time your entry and exit perfectly, it's important to remember that penny stocks that have been subject to artificial hype are usually unable to maintain their elevated share price for more than a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed by solid fundamentals. Despite the recent 1 percent decline, Greenlane Holdings still presents a potential investment opportunity. The possible upside price stands at
$5.44, significantly higher than the naive expected forecast value of $0.56. The valuation hype value and the valuation real value are closely matched at 0.49 and 0.48 respectively, suggesting that the stock is not overly hyped. Furthermore, the valuation market value of $0.55 indicates that the stock is fairly valued. However, investors should be cautious as there is a possible downside price of
$0.0055. The analyst overall consensus is a 'Hold', with one analyst maintaining a hold position. As the fiscal year end approaches in December, investors should keep a close eye on Greenlane Holdings' performance. .
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Greenlane Holdings. Please refer to our
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