Why Sundial Stock Blasted 12% Higher Today

Investors were very high on Sundial (SNDL 11.89%) stock on Monday to the point where they sent its share price almost 12% higher. This was on the back of a third-quarter earnings release and a new stockholder-pleasing move the Canadian marijuana company announced.

Sundial’s third quarter saw notable improvements

For the period, Sundial’s net revenue came in at 237.6 million Canadian dollars ($171.2 million), a 3% improvement over the same quarter of 2022. The weed company also managed to narrow its net loss considerably; this came in at just under CA$22 million ($15.9 million) against the year-ago deficit of nearly CA$99 million ($71.7 million).

These days, Sundial makes the bulk of its revenue as a retailer of both marijuana and alcohol. Of the two, it was the former that saw meaningful growth, with net revenue rising 14% year over year to almost CA$76 million ($55.1 million). The take for liquor was essentially flat at just under CA$152 million ($110.1 million).

Meanwhile, the company’s No. 3 revenue stream, cannabis operations, saw a robust 77% increase to CA$21 million ($15.2 million).

More importantly, given the frequent struggles of cannabis companies to stay liquid and solvent, Sundial’s free-cash-flow (FCF) figure was positive across the quarter, landing at CA$16.5 million ($12 million). That was quite the improvement over the negative CA$67 million ($48.5 million) and change in 2022’s Q3.

Stock-buyback program refreshed

Sounding a strong note of confidence in its future, Sundial also announced the renewal of its share-repurchase program. The new initiative will come after the current one expires next Monday, Nov. 20. Under the upcoming program, Sundial is authorized to buy back up to CA$100 million ($72.5 million) worth of its common stock. The authorization is valid until Nov. 20, 2024.

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