Curaleaf Holdings Inc (OTCMKTS: CURLF) Primed For Further Gains

Curaleaf Holdings Inc (OTCMKTS: CURLF) is bringing the heat on having embarked on an aggressive expansion drive. Completion of two strategic acquisitions underscores the company’s push for inorganic growth as it expands into some of the fastest growing cannabis markets.

CURLF Share Price Analysis

The stock also continues to register impressive gains in the market as investors take note of the company’s growing revenue base. Curaleaf is fresh from reporting a 407% increase in revenues, in the recent quarter.The company projecting managed revenue of $400 million and free cash flow of $100 million, for 2019, affirms the love it continues to receive in the market. Robust revenue growth attests to a company that is in a phase of robust growth.However, the company must work on its margins if it is to command a high valuation. A wider than expected net loss in the recent quarter is something that could continue to weigh down, the stock’s sentiments.The stock rallying by more than 40% underscores strengthening investor confidence given that it did succumb to short selling pressure last year. In the meantime, the stock is trading in an uptrend, pullbacks having emerged as buy opportunities. CURLF Daily ChartThe $6.40 mark is a mid-term support level above which Curaleaf remains well supported and positioned to continue flying high. On the upside, the $8 mark is a critical resistance level that stock needs to close above, to turn bullish as a long-term play.Conversely, a breach of the $6.40 support could leave the stock susceptible to further drops in continuation of the long-term downtrend. Improving fundamentals support further upside action on pullbacks.

What Does Curaleaf Do?

Curaleaf is a vertically integrated wellness and cannabis operator. The company is engaged in the cultivation, production, and distribution of cannabis products in a number of states. It also provides non-cannabis services to licensed cannabis operators in areas of cultivation, extraction, and production.

Why is Curaleaf Due for A Breakout?

Curaleaf is a potential breakout play on serving a number of catalysts that continue to strengthen its market sentiments. For starters, investors are slowly taking note of its aggressive acquisition drive that affirm growth metrics.In February, the company inked a definitive agreement to acquire Eureka Investments Partners. The acquisition is part of the company’s efforts of expanding its influence in California, a vital cannabis marketplace.With the acquisition, the company gains access to Eureka’s Salinas Valley cultivation facility expected to strengthen its cannabis cultivation capabilities. Curaleaf will also strengthen its dispensary footprint with three new dispensaries located in Long Beach, Salinas and Monterey County.

The Eureka transaction represents a significant milestone for Curaleaf, enabling us to enter the highly attractive California market with a cultivation platform that we intend to use for statewide product distribution,” Curaleaf CEO Joseph Lizard in a statement.

The company has since followed Eureka acquisition with yet another takeover this time in the name of Acres Cannabis. Curaleaf is acquiring a vertically integrated operator with one of the largest cannabis cultivation facility in Nevada.Acres Cannabis is the owner of a state-of-the-art cannabis production and extraction lab. It also owns an immersive cannabis dispensary in Las Vegas.The two acquisitions are poised to increase Curaleaf cultivation and manufacturing operations in the two states. In addition, the acquisitions come at a time when Curaleaf is enjoying robust revenue growth.

Revenue Growth

The company is fresh from reporting revenues of $32 million for Q4, representing a 408% year over year growth.Gross profit before the impact of biological assets surged to $20 million in Q4 compared to $4.6 million reported a year earlier. Gross profit on cannabis sales alone came in at $11.8 million, resulting in a 50% margin.However, the company plunged to an overall net loss of -$16.5 million in Q4 compared to a net income of $0.6 million delivered a year earlier. Curaleaf attributes to the wider than expected net loss to one-time charges related to acquisitions.

Bottom Line

Curaleaf remains well positioned to continue growing at an impressive rate as it continues to acquire licenses in limited markets as it strives to increase presence in new and current markets. The company is also targeting a wider retail store footprint as it seeks to strengthen its revenue streams as well as sentiments among investors. The stock is an attractive breakout play as it remains supported by improving fundamentals set to fuel upside action.We will be updating our subscribers as soon as we know more. For the latest updates on CURLF, sign up below!Disclosure: We have no position in CURLF and have not been compensated for this article.