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Charlotte's Web Holdings (TSE:CWEB)
TSX:CWEB
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Charlotte's Web Holdings
(TSX:CWEB)
46Neutral
Charlotte's Web Holdings (CWEB) vs. S&P 500 (SPY)
Market Cap
$17.38M
Dividend YieldN/A
Average Volume (3M)40.34K
Price to Earnings (P/E)―
Beta (1Y)0.83
Revenue Growth-20.19%
EPS Growth-10.71%
CountryCA
Employees112
SectorHealthcare
Sector Strength74
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.26
Shares Outstanding158,009,540
10 Day Avg. Volume66,312
30 Day Avg. Volume40,345
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.30
Price to Cash Flow (P/CF)-1.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$0.50Price Target Upside521.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Charlotte's Web Holdings Business Overview & Revenue Model
Company DescriptionCharlotte's Web Holdings, Inc. (CWEB) is a leading company in the cannabidiol (CBD) wellness industry. The company specializes in the production and distribution of high-quality hemp-derived CBD products. Its core product offerings include CBD oils, gummies, capsules, and topicals, designed to promote overall health and wellness. Charlotte's Web is well-regarded for its commitment to quality and transparency, utilizing proprietary hemp genetics and rigorous testing standards to ensure the consistency and purity of its products.
How the Company Makes MoneyCharlotte's Web Holdings generates revenue primarily through the sale of its CBD products across various channels. The company's revenue streams include direct-to-consumer sales via its e-commerce platform, wholesale distribution to retailers, and partnerships with various health and wellness outlets. Charlotte's Web also benefits from its strong brand reputation and consumer trust, which contribute to its market presence and sales. Key factors influencing its earnings include product innovation, expansion into new markets, and strategic partnerships that enhance distribution capabilities and brand visibility.
Charlotte's Web Holdings Financial Statement Overview
Summary
Charlotte's Web Holdings is experiencing significant financial challenges, marked by declining revenues, profitability issues, and increasing financial risk due to higher leverage. Continued negative cash flows and strained margins suggest potential difficulties in sustaining operations without strategic improvements.Income Statement
The company has faced declining revenues over the years, with a significant drop in the most recent year. Gross profit margin has also deteriorated from 54% in 2021 to 43% in 2024, indicating pressure on profitability. The net profit margin remained negative, reflecting ongoing losses. Despite efforts, EBIT and EBITDA margins remain negative, indicating operational challenges.45
Neutral
Balance Sheet
The debt-to-equity ratio increased from 0.09 in 2021 to 2.19 in 2024, suggesting a significant rise in leverage. The equity ratio dropped from 76% in 2021 to 24% in 2024, indicating reduced financial stability. Return on equity remains negative, highlighting profitability issues. The balance sheet reflects increasing financial risk due to higher debt levels.50
Neutral
Cash Flow
Operating cash flow has remained negative, with free cash flow worsening over the period. The free cash flow to net income ratio is negative due to ongoing losses. The operating cash flow to net income ratio is also negative, reflecting cash flow challenges. The company faces difficulties in generating positive cash flow, which could impact its ability to fund operations.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 49.67M | 63.16M | 74.14M | 96.09M | 95.23M | Gross Profit |
| 21.26M | 35.57M | 19.41M | 48.59M | 52.26M | EBIT |
| -31.99M | -40.61M | -50.65M | 39.52M | -52.47M | EBITDA |
| -22.01M | -24.90M | -41.68M | -38.03M | -42.53M | Net Income Common Stockholders |
| -29.85M | -23.80M | -59.31M | -137.72M | -47.19M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 22.62M | 47.82M | 66.96M | 19.49M | 52.80M | Total Assets |
| 113.44M | 152.55M | 187.64M | 171.51M | 310.88M | Total Debt |
| 59.34M | 60.44M | 57.63M | 22.60M | 23.36M | Net Debt |
| 36.72M | 12.62M | -9.33M | 3.11M | -29.45M | Total Liabilities |
| 86.36M | 96.99M | 110.14M | 41.07M | 56.65M | Stockholders Equity |
| 27.09M | 55.56M | 77.50M | 130.45M | 254.23M |
| Cash Flow | Free Cash Flow | |||
| -25.11M | -19.08M | -5.58M | -34.48M | -76.85M | Operating Cash Flow |
| -21.26M | -15.39M | -5.32M | -29.56M | -48.59M | Investing Cash Flow |
| -3.80M | -3.51M | 395.00K | -11.79M | -19.44M | Financing Cash Flow |
| -145.00K | -251.00K | 52.39M | 8.04M | 52.28M |
Charlotte's Web Holdings Technical Analysis
Negative
0.08
Price Trends
0.14
Negative
0.15
Negative
0.18
Negative
Market Momentum
>-0.01
Positive
43.07
Neutral
8.33
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CWEB, the sentiment is Negative. The current price of 0.08 is below the 20-day moving average (MA) of 0.13, below the 50-day MA of 0.14, and below the 200-day MA of 0.18, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.07 is Neutral, neither overbought nor oversold. The STOCH value of 8.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CWEB.
Charlotte's Web Holdings Risk Analysis
Charlotte's Web Holdings disclosed 84 risk factors in its most recent earnings report. Charlotte's Web Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Charlotte's Web Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
52 Neutral | $169.18M | ― | -18.27% | ― | 7.33% | 84.41% | |
48 Neutral | $6.36B | 1.24 | -44.94% | 2.70% | 18.33% | 1.47% | |
47 Neutral | $315.58M | 23.66 | 4.78% | ― | 16.39% | -98.10% | |
46 Neutral | $17.38M | ― | -72.23% | ― | -20.19% | -10.71% | |
46 Neutral | $543.18M | ― | -31.06% | ― | 11.22% | -108.58% | |
42 Neutral | $239.04M | ― | -84.50% | ― | -16.27% | ― |
* Healthcare Sector Average
Performance Comparison
TSE:CWEB
Charlotte's Web Holdings
0.09
-0.22
-72.58%
TLRY
Tilray
0.53
-1.49
-73.76%
TSE:WEED
Canopy Growth
1.26
-11.18
-89.87%
TSE:ACB
Aurora Cannabis
5.99
-3.23
-35.03%
TSE:OGI
OrganiGram Holdings
1.36
-1.49
-52.28%
Charlotte's Web Holdings Earnings Call Summary
Earnings Call Date: Mar 19, 2025 | % Change Since: -38.46% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive developments, including a return to quarterly revenue growth, successful product expansion, and significant cost reductions. However, ongoing challenges, such as a year-over-year revenue decline, reduced gross margins, and regulatory hurdles, were also evident. The company is optimistic about its strategic initiatives and future growth, yet it acknowledges the need to address current headwinds.Highlights
Return to Consecutive Quarterly Revenue Growth
Achieved consecutive quarterly revenue growth throughout 2024, marking a pivotal year for Charlotte's Web after years of decline.
Successful Launch of New E-commerce Platform
The new e-commerce platform led to a 20% reduction in shopping cart abandonment, improving conversion rates significantly.
Expansion of Product Offerings
Successful introduction of functional mushroom gummies, expanding into the mushroom wellness market valued at over $200 million per year, with new products soon available on Amazon.
Significant Cost Reduction Initiatives
Achieved an $8 million reduction in SG&A expenses in Q4, marking a 43.3% decrease year-over-year.
Milestone in Botanical Drug Development
DeFloria's IND application was accepted by the FDA for Phase II clinical trials, representing a potential long-term revenue opportunity.
Strategic Retail Partnerships
Expanded retail partnership with Walmart and initial sales success with Chewy.com, enhancing market presence.
Lowlights
Decline in Year-over-Year Revenue
Net revenue was $12.7 million in Q4, down 20% from the prior year, reflecting broader category headwinds.
Reduced Gross Margin
Q4 gross profit margin decreased to 40.2%, down 15.8 basis points compared to Q4 2023 due to holiday promotions and shipping inefficiencies.
Continued Net Loss
Reported a Q4 net loss of $3.4 million, albeit a reduction compared to the previous year.
Regulatory Challenges in Retail
State-level restrictions impacted retail performance, highlighting the need for federal regulations.
Company Guidance
During the Charlotte's Web Holdings Inc. fourth quarter conference call, the company highlighted several key metrics and strategic initiatives aimed at driving future growth. The company reported a net revenue of $12.7 million for the quarter, reflecting a 20% year-over-year decline but showing modest quarter-over-quarter growth. The gross profit for Q4 was $5.1 million, with a margin of 40.2%, impacted by holiday promotions and shipping inefficiencies. However, the company achieved significant cost reductions, with SG&A expenses dropping by 43.3% to $10.6 million. The adjusted EBITDA was positive at $0.3 million, marking a $6.2 million improvement from the previous year. For the full fiscal year, total revenue stood at $49.7 million, down 21.4% year-over-year, while the gross profit before inventory provision was $25.4 million, representing 51.1% of net revenue. The company ended the year with $22.6 million in cash reserves, positioning it for growth in 2025. Key strategic moves included the expansion into the functional mushroom market and a rebranding initiative to unify its product portfolio. Additionally, Charlotte's Web is poised to benefit from its collaboration with DeFloria, which received FDA acceptance for Phase II clinical trials, potentially opening new revenue streams.Charlotte's Web Holdings Corporate Events
Product-Related AnnouncementsBusiness Operations and StrategyFinancial Disclosures
Charlotte’s Web Holdings Reports Strong 2024 Growth and Strategic Expansion
Positive
Mar 19, 2025
Charlotte’s Web Holdings reported substantial growth and cost optimization in 2024, achieving sequential quarterly revenue growth and reducing operating expenses by over $22.4 million. The company launched a new e-commerce platform, expanded retail partnerships, and introduced new product innovations, including functional mushroom gummies and CBD gel caps. These efforts, along with a transition to in-house manufacturing, have positioned the company for sustained growth in 2025. The company’s strategic initiatives have improved operational efficiencies and expanded its market reach, setting the stage for further growth in the botanical wellness industry.
Financial Disclosures
Charlotte’s Web to Announce 2024 Q4 and Year-End Financial Results
Neutral
Feb 25, 2025
Charlotte’s Web Holdings announced it will release its 2024 fourth quarter and year-end financial results on March 19, 2025, followed by a conference call to discuss the results. This announcement is significant for stakeholders as it provides insights into the company’s financial health and market performance, potentially impacting its industry positioning and investor relations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.