Curaleaf Earnings: 2023 Ends With More Sales Growth and a Healthy Margin; Shares Undervalued

No-moat Curaleaf reported fourth-quarter sequential net revenue growth of 4% compared with 1% in the third quarter. Moreover, its adjusted EBITDA margin reached 24%, a slight improvement from third quarter’s 23% mark. Full-year revenue of $1.34 billion was within our expectations. Still, profitability was better than we expected as its 23% adjusted EBITDA margin was a few hundred basis points higher than we forecast. For 2024, Curaleaf expects mid-single-digit top-line growth and a mid-20% adjusted EBITDA margin. Compared with our existing forecast, this sales growth outlook is slightly lower, but this margin outlook is slightly higher. We expect our forecast changes to offset, leading to minimal changes in our per-share $13/CAD 18 fair value estimates.