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Here's How Cresco Labs (CRLBF) is Placed Before Q1 Earnings
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Cresco Labs Inc. (CRLBF - Free Report) is scheduled to report first-quarter 2024 results on May 15.
For the fourth quarter of 2023, the company reported earnings of 1 cent against the Zacks Consensus Estimate of a loss of 2 cents per share. Cresco Labs missed estimates in two of the trailing four quarters, surpassed in one, and matched the same in the other, the average surprise being 8.33%.
Let's take a look at how things have shaped up prior to this announcement.
Factors at Play
Cresco Labs has been focusing on executing strategies to rationalize and optimize the company’s operations over the last year. These are expected to have been significantly helpful in capturing core market share over the past few quarters. With the company still focusing on the same, we expect to see positive outcomes in the first-quarter results with respect to core markets, core stores, core brands and core products.
This rationalization and optimization effort is also expected to have positively impacted the company’s first-quarter margins, profitability and cash flow.
Further, the company is also expected to have gained from the ongoing intelligent upgrades to its Ohio infrastructure,banking on the successful playbooks from the other adult use conversions. The company earlier noted that it is watching Pennsylvania and Florida's adult use timelines, making investments ahead of those anticipated conversions. These two regions, according to the Business and Defense Services Administration, will represent a combined $4 billion opportunity. We expect this to have had a positive impact on the company’s first-quarter performance.
Added to this, Cresco Labs, in 2023, launched hundreds of new strains across the core markets.
The company has also been putting in efforts to continuously enhance its cultivation and automation capabilities. This resulted in a positive contribution in the latter half of 2023 in terms of 2.2 million more grams of flower produced on 9% less canopy, a 10% increase in grams per square foot.
Both of these developments should also have a similar positive impact on the company’s results this time.
Q1 Estimates
The Zacks Consensus Estimate for Cresco Labs’ first-quarter 2024 revenues is pegged at $183.3 million, suggesting a fall of 5.6% from the year-ago reported figure.
The Zacks Consensus Estimate for its first-quarter 2024 loss stands at 1 cent per share, 77.8% narrower than the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Cresco Labs has an Earnings ESP of -28.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently has a Zacks Rank #2.
Image: Bigstock
Here's How Cresco Labs (CRLBF) is Placed Before Q1 Earnings
Cresco Labs Inc. (CRLBF - Free Report) is scheduled to report first-quarter 2024 results on May 15.
For the fourth quarter of 2023, the company reported earnings of 1 cent against the Zacks Consensus Estimate of a loss of 2 cents per share. Cresco Labs missed estimates in two of the trailing four quarters, surpassed in one, and matched the same in the other, the average surprise being 8.33%.
Let's take a look at how things have shaped up prior to this announcement.
Factors at Play
Cresco Labs has been focusing on executing strategies to rationalize and optimize the company’s operations over the last year. These are expected to have been significantly helpful in capturing core market share over the past few quarters. With the company still focusing on the same, we expect to see positive outcomes in the first-quarter results with respect to core markets, core stores, core brands and core products.
This rationalization and optimization effort is also expected to have positively impacted the company’s first-quarter margins, profitability and cash flow.
Further, the company is also expected to have gained from the ongoing intelligent upgrades to its Ohio infrastructure,banking on the successful playbooks from the other adult use conversions. The company earlier noted that it is watching Pennsylvania and Florida's adult use timelines, making investments ahead of those anticipated conversions. These two regions, according to the Business and Defense Services Administration, will represent a combined $4 billion opportunity. We expect this to have had a positive impact on the company’s first-quarter performance.
Added to this, Cresco Labs, in 2023, launched hundreds of new strains across the core markets.
Cresco Labs Inc. Price
Cresco Labs Inc. price | Cresco Labs Inc. Quote
The company has also been putting in efforts to continuously enhance its cultivation and automation capabilities. This resulted in a positive contribution in the latter half of 2023 in terms of 2.2 million more grams of flower produced on 9% less canopy, a 10% increase in grams per square foot.
Both of these developments should also have a similar positive impact on the company’s results this time.
Q1 Estimates
The Zacks Consensus Estimate for Cresco Labs’ first-quarter 2024 revenues is pegged at $183.3 million, suggesting a fall of 5.6% from the year-ago reported figure.
The Zacks Consensus Estimate for its first-quarter 2024 loss stands at 1 cent per share, 77.8% narrower than the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Cresco Labs has an Earnings ESP of -28.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently has a Zacks Rank #2.
Stocks Worth a Look
Gritstone bio, Inc. (GRTS - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank of 2. GRTS has an estimated growth rate of 20.8% for 2024. You can see the complete list of today’s Zacks #1 Rank stocks here.
Gritstone’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 12.1%.
Erasca, Inc. (ERAS - Free Report) has an Earnings ESP of +12.20% and a Zacks Rank of 2. ERAS has an estimated long-term growth rate of 37.5%.
Erasca’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 17.6%.
Alcon (ALC - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank of 3. ALC has an estimated long-term growth rate of 12.8%.
Alcon’s earnings surpassed estimates in three out of the trailing four quarters and missed in one, with the average surprise being 7.35%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.