Flora Growth (FLGC) AI Stock Analysis

• Market Cap: $15.01M
• Dividend Yield: N/A
• Average Volume (3M): 109.37K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.54
• Revenue Growth: -28.78%
• EPS Growth: 86.97%
• Country: US
• Employees: 64
• Sector: Healthcare
• Sector Strength: 49
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -0.04
• Shares Outstanding: 22,568,653
• 10 Day Avg. Volume: 136,414
• 30 Day Avg. Volume: 109,366
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.01
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: 0.05
• Enterprise Value/Gross Profit: 1.05
• Enterprise Value/Ebitda: -0.21
• 1Y Price Target: $1.50
• Price Target Upside: 127.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 42 Neutral
• Price Target: $0.50 ▼(-24.24%Downside)

The overall stock score reflects significant financial instability as the primary factor, with persistent losses and a weakened balance sheet posing substantial risks. Technical analysis provides some short-term positive signals, but the overall valuation remains unattractive due to continued negative earnings. Strategic changes are essential for improving financial health and long-term prospects.

Flora Growth Business Overview & Revenue Model

Company Description

Flora Growth Corp., together with its subsidiaries, engages in the growth, cultivation, and development of medicinal cannabis and medicinal cannabis derivative products to pharmacies, medical clinics, and cosmetic companies worldwide. It cultivates, processes, and supplies medicinal-grade cannabis oil, and cannabis derived medical and wellness products; offers skincare and beauty products; develops plant-based and medical-grade pharmaceuticals, phytotherapeutics, and dietary supplements; and designs and markets loungewear made from hemp-derived fabric and materials. The company also manufactures, distributes, and retails cannabidiol (CBD) derived products, such as gummies, topicals, tinctures, and vape products; lifestyle wellness products, including edibles, bath and body, pets, sports recovery, etc.; provides cannabis consumption accessories, personal storage, and travel accessories for vape and dry herb categories; and offers juices, exotic fruits coated with chocolate, and chocolate bars, as well as dried fruits, beans, and pulp from Amazonian fruits in supermarkets, discount retailers, coffee shops, restaurants, and airports. In addition, it engages in the manufacturing, promotion, and distribution of beverage products; manufacture and sale of product formulations for pain relief; and development of pharmaceutical cannabinoid formula for the prevention of Sars-Cov-2. The company sells its products under the JustCBD, Vessel, Mind Naturals, Mambe, Stardog, Tonino Lamborghini, and Kalaya brands. Flora Growth Corp. was incorporated in 2019 and is headquartered in Toronto, Canada.

How the Company Makes Money

Flora Growth makes money through several key revenue streams. The primary source of revenue comes from the cultivation and sale of cannabis products, which includes dried flower, oils, and other derivatives. Additionally, the company generates income from its wellness and cosmetics brands, which utilize cannabis-derived ingredients. Flora Growth's revenue model is supported by strategic partnerships and distribution agreements that enable the company to expand its market reach both domestically and internationally. These partnerships often involve collaborations with other companies in the pharmaceutical, cosmetics, and consumer goods industries, enhancing product accessibility and brand recognition. The company's vertically integrated operations, from cultivation to distribution, allow it to maintain cost efficiencies and maximize profitability.

Flora Growth Financial Statement Overview

Summary

Flora Growth's financial performance is under significant pressure. The company is experiencing declining revenue, persistent operating losses, and a deteriorating balance sheet with increased leverage and reduced equity. Although there is slight improvement in free cash flow, overall financial stability remains weak, necessitating strategic interventions to regain profitability.

Income Statement

Flora Growth's income statement shows a significant decline in revenue from $76.07 million in 2023 to $59.51 million in 2024, indicating a negative revenue growth rate of -21.75%. Additionally, the company has been consistently operating at a loss with a negative net profit margin, as net income remains negative across the years, reaching -$15.91 million in 2024. Gross profit margin has also declined from 23.32% in 2023 to 21.00% in 2024, reflecting reduced operational efficiency. These factors point to struggles in maintaining profitability and revenue growth.

Balance Sheet

The balance sheet of Flora Growth highlights a challenging financial position, with a debt-to-equity ratio that has risen to 1.09 in 2024, reflecting increased leverage. Stockholders' equity has decreased significantly, from $6.40 million in 2023 to $4.51 million in 2024. The equity ratio has also declined to 17.20% in 2024, suggesting a lower proportion of equity financing. The company faces potential risks due to its high leverage and declining equity position.

Cash Flow

Cash flow analysis for Flora Growth reveals some improvement in free cash flow, which, while still negative at -$5.17 million in 2024, has improved from -$8.56 million in 2023. However, operating cash flow remains negative, indicating continuous cash outflows from core operations. The operating cash flow to net income ratio remains unfavorable, given the negative net income. Despite the improvement in free cash flow, the company faces challenges in generating positive cash flow from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	53.26M	59.51M	76.07M	37.17M	8.98M	106.00K
Gross Profit	11.53M	12.50M	17.74M	14.41M	2.42M	71.00K
EBITDA	-12.83M	-15.10M	-45.87M	-17.91M	-20.61M	-14.19M
Net Income	-13.29M	-15.91M	-57.04M	-52.63M	-21.36M	-14.26M
Balance Sheet
Total Assets	22.39M	26.23M	23.63M	80.99M	85.48M	19.45M
Cash, Cash Equivalents and Short-Term Investments	3.68M	6.02M	4.35M	9.54M	37.61M	15.52M
Total Debt	5.25M	4.90M	3.67M	4.14M	1.34M	649.00K
Total Liabilities	17.64M	21.72M	17.22M	24.57M	8.54M	3.20M
Stockholders Equity	4.76M	4.51M	6.40M	56.82M	77.17M	16.36M
Cash Flow
Free Cash Flow	-6.49M	-5.17M	-8.56M	-17.23M	-24.63M	-8.65M
Operating Cash Flow	-6.42M	-5.03M	-8.40M	-15.94M	-20.65M	-8.42M
Investing Cash Flow	728.00K	203.00K	-234.00K	-15.80M	-14.55M	-2.16M
Financing Cash Flow	5.31M	6.49M	3.15M	4.41M	58.11M	25.82M

Flora Growth Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.66
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLGC, the sentiment is Negative. The current price of 0.66 is below the 20-day moving average (MA) of 0.68, above the 50-day MA of 0.64, and below the 200-day MA of 1.00, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 47.47 is Neutral, neither overbought nor oversold. The STOCH value of 23.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLGC.

Flora Growth Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNDL	52 Neutral	$313.93M	―	-9.20%	―	-3.02%	26.00%
Sector *	51 Neutral	$7.39B	0.31	-61.07%	2.34%	17.46%	1.71%
TLRY	44 Neutral	$403.85M	―	-31.06%	―	11.22%	-108.58%
FLGC	42 Neutral	$15.01M	―	-336.65%	―	-28.78%	86.97%
YCBD	40 Underperform	$7.75M	―	-8.46%	―	-9.22%	89.90%
IXHL	39 Underperform	$19.91M	―	-201.88%	―	―	―
KALA	31 Underperform	$30.33M	―	-576.46%	―	―	38.50%

Flora Growth Corporate Events

Flora Growth Ends Agreement with Aegis Capital

Flora Growth Corp. and Aegis Capital Corp. have jointly decided to terminate their At-The-Market Issuances Sales Agreement, effective December 12, 2024. Subsequently, Flora Growth filed a prospectus supplement to de-register the common shares previously registered for issuance under this agreement, indicating a shift in their capital raising strategy.

Flora Growth Restructures Board with New Appointments

Flora Growth Corp. announced the resignation of Brendan Cahill from its board of directors and the appointment of Sammy Dorf and Manfred Leventhal as new directors. Sammy Dorf, a notable figure in the cannabis industry, has been appointed as Executive Chairman, bringing significant expertise and potential growth opportunities to Flora Growth. Manfred Leventhal’s appointment as an independent director strengthens Flora’s compliance with Nasdaq’s audit committee requirements and enhances its corporate governance.