SNDL stock jumps more than 7% on Q3 revenue beat

SNDL (SNDL) stock has jumped 7.3% in Monday's premarket after revenue for the third quarter came in ahead of estimates. Among what sparse analyst predictions did circulate, expectations averaged nearly $175 million. Instead, the Canadian cannabis producer and alcohol distributor formerly known as Sundial Growers offered up its highest revenue to date – $230.5 million.

SNDL earnings news

The company's net loss of $98.8 million was quite substantial, but management said $95 million was attributable to non-cash impairments and a drop in the value of warrants. Across the corporation's 236 million shares, this amounts to a per-share loss of $0.42. Adjusted by removing the non-cash charges, SNDL fielded a per share bottom line of $-0.02 – right in line with estimates.

"As a result of our team's focus on operational execution and sustainable profitability, we delivered record revenue and cash flow from operations in the third quarter," said Zach George, Chief Executive Officer of SNDL.

Adjusted EBITDA rose to $13.7 million compared to just $2.8 million in the second quarter. It is difficult to compare these figures on a YoY basis since the Alcanna acquisition did not finalize until earlier this year.

Management repurchased about 1.2 million shares at a weighted-average price of $2.64 during the quarter. Management extended the existing share repurchase program to November 2023 and said it could purchase up to 101 million shares based on the policy.

SNDL had $988 million on its balance sheet at the end of Q3, $278 million of which was unrestricted. The company prided itself on having no long-term debt and not raising further equity since the summer of 2021.

SNDL stock forecast

The only important thing to see here is that the daily candle for Monday has gapped up beyond the 100-day moving average in purple. Since mid-year SNDL stock has pushed above the descending trendline that formed a cap for the first part of 2022. That was a sign of things to come. Bulls will now focus on the $3.60 resistance price level that stopped them in July and August. Another resistance top was formed at $3.90 in June. These are the points where profit-taking is likely to occur.

SNDL 1-day chart