Sundial Growers (NASDAQ:SNDL) Stock Surges 55% YTD: How to Trade Now?

Shares of Sundial Growers (NASDAQ:SNDL) have surged by 55% this year, leaving behind both the S&P 500 and cannabis sector. The firm acquired Canadian cannabis retail chain, Inner Spirit and is also going ahead with joint venture with SAF group for financing cannabis opportunities worldwide.

The Canadian company had a good quarter one and positive adjusted EBITDA as well as revenue from capital investments. Strategic investments will be important to the firm’s long-term prospect. Yet, the firm is unprofitable with sales dropping 36.4% in last one year, when people were inside homes and U.S witnessed record sales of cannabis.

For value investors, SNDL is beginning to look attractive. Besides positive EBITDA, the firm had $1.08 billion unrestricted cash and long-term investments with no outstanding debt. According to the company’s corporate presentation in May 2021, Inner Spirit owns 19 corporate retail cannabis outlets and also 67 franchise outlets, with the firm planning to open 30 new stores in the year.

Sundial is also focusing on inhalable market. Founded in 2006 and having over a billion dollars in cash, the firm has a number of options but caution needs to be ensured.

Cannabis market still awaits greater federal legalization on the U.S. front for succeeding. There is now lower interest of institutional interest in the company and mostly depends on retail traders.

Market Reaction:

On Tuesday, SNDL stock gained about 4% at $0.84 with more than 105.40 million shares, compared to its average volume of 8.84 million shares. The stock has moved within a range of $0.7870 – 0.8480 after opening the trade at $0.82. Over the past 52-week, the stock has been trading within a range of $0.1380 – 3.9600.