Lowell Farms (LOWL) AI Stock Analysis

• Market Cap: C$272.55K
• Dividend Yield: N/A
• Average Volume (3M): 0.00
• Price to Earnings (P/E): ―
• Beta (1Y): -2.32
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: CA
• Employees: 96
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): N/A
• Shares Outstanding: 18,149,650
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.21
• Price to Sales (P/S): 0.08
• P/FCF Ratio: -0.39
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 34 Underperform
• Price Target: ―

Lowell Farms faces critical financial and operational challenges, with consistent revenue declines and negative profitability metrics. High leverage and negative cash flows exacerbate the risk profile. Despite some strategic expansions and cost-cutting measures, the company struggles with supply chain issues and a weak financial position. Technical indicators are neutral, but the overall financial health remains a significant concern.

Positive Factors

Strategic Expansion

Expanding into the California retail market leverages Lowell Farms' brand presence and integrated model, potentially capturing critical margins and supporting financial goals in a competitive market.

New CFO Appointment

The appointment of a new CFO with significant industry experience aims to enhance financial strategy and drive growth, potentially improving financial management and operational efficiency.

Efficiency Improvements

Efficiency improvements in the CPG segment, particularly in automated packaging, indicate operational advancements that could lead to better cost management and increased profitability.

Negative Factors

Revenue Decline

Significant revenue decline reflects shrinking sales volumes and market challenges, potentially impacting long-term growth and financial stability if not addressed.

Negative Cash Flow

Persistent negative cash flow indicates ongoing cash management issues, limiting the company's ability to invest in growth opportunities and posing risks to financial health.

High Leverage

High leverage increases financial risk, particularly with negative equity trends, potentially constraining future borrowing capacity and financial flexibility.

Lowell Farms Business Overview & Revenue Model

Company Description

Lowell Farms Inc. engages in the cultivation, extraction, manufacturing, sale, marketing, and distribution of cannabis products to retail dispensaries in California. The company provides flowers, vape pens, oils, extracts, chocolate edibles, mints, gummies, topicals, tinctures, and pre-rolls under the Lowell Herb Co., Lowell Smokes, Cypress Reserve, Flavor Extracts, Kaizen, House Weed, Moon, Altai, Humble Flower, Original Pot Company, and CannaStripe brands. It also offers manufacturing, extraction, and distribution services to third-party cannabis and cannabis branding companies. The company was formerly known as Indus Holdings, Inc. and changed its name to Lowell Farms Inc. in March 2021. Lowell Farms Inc. was founded in 2014 and is based in Salinas, California.

How the Company Makes Money

Lowell Farms makes money through the sale of its cannabis products across various segments, including wholesale and retail distribution. The company's key revenue streams include direct sales of its branded flower and pre-roll products through retail dispensaries and partnerships with other cannabis retailers. Lowell Farms also generates revenue from its extraction and manufacturing capabilities, producing oils and concentrates that are sold under its own brand or white-labeled for other companies. Significant partnerships with distribution networks and retail chains increase its market reach and contribute to its earnings. The company focuses on maintaining a strong brand presence and product quality to drive sales and business growth.

Lowell Farms Financial Statement Overview

Summary

Lowell Farms is facing severe financial challenges, characterized by persistent losses, high leverage, and negative cash flows. The income statement shows declining revenue and margins, the balance sheet reflects high debt and negative equity, and cash flow metrics indicate significant cash management issues.

Income Statement

Lowell Farms has shown a declining trend in revenue over the years, with the latest TTM revenue being significantly lower than previous years. The company has consistently reported negative gross profit margins and net profit margins, indicating operational inefficiencies and sustained losses. EBIT and EBITDA margins are also negative, further highlighting the unprofitability. The revenue growth rate has been negative, reflecting shrinking sales volumes.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio, indicating substantial leverage that may pose financial risks, especially given the negative equity trend. The return on equity is negative due to consistent net losses, leading to diminished shareholder value. The equity ratio is low, reflecting a high dependency on debt financing. The declining total assets and stockholders' equity are concerning.

Cash Flow

Lowell Farms' cash flow situation is troubling, with negative operating and free cash flows, signaling cash outflows exceeding inflows. The free cash flow growth rate remains negative, demonstrating a lack of improvement in cash generation. Ratios of operating and free cash flow to net income are not meaningful due to negative values, highlighting persistent cash management issues.

Breakdown	TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	19.34M	28.27M	43.53M	53.72M	42.62M	37.05M
Gross Profit	-9.54M	-7.44M	-1.84M	2.48M	19.09M	-9.23M
EBITDA	-17.63M	-14.10M	-10.93M	-15.77M	-15.15M	-44.99M
Net Income	-20.72M	-37.34M	-24.56M	-24.68M	-7.62M	-50.75M
Balance Sheet
Total Assets	28.44M	37.61M	118.82M	137.38M	112.38M	69.21M
Cash, Cash Equivalents and Short-Term Investments	320.00K	3.44M	1.10M	7.89M	25.75M	1.34M
Total Debt	18.45M	19.52M	64.39M	59.61M	54.05M	35.26M
Total Liabilities	24.23M	26.14M	70.71M	67.07M	66.26M	44.85M
Stockholders Equity	4.21M	11.48M	48.12M	70.31M	46.12M	24.36M
Cash Flow
Free Cash Flow	-5.76M	-6.18M	-10.69M	-29.64M	-14.60M	-49.31M
Operating Cash Flow	-5.68M	-6.04M	-6.44M	-26.05M	-7.75M	-39.32M
Investing Cash Flow	516.47K	-135.00K	-4.19M	-7.77M	-5.61M	-10.06M
Financing Cash Flow	-60.38K	7.39M	3.85M	15.96M	37.77M	40.42M

Lowell Farms Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LOWL, the sentiment is Negative. The current price of 0.02 is above the 20-day moving average (MA) of 0.02, below the 50-day MA of 0.02, and below the 200-day MA of 0.02, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 12.75 is Positive, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:LOWL.

Lowell Farms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CNTR	46 Neutral	C$463.91K	-1.68	―	―	―	―
MJRX	46 Neutral	C$281.76K	-0.21	―	―	-42.42%	-17.33%
XCX	41 Neutral	C$258.28K	-0.40	5.70%	―	―	-406.12%
LOWL	34 Underperform	C$272.55K	-0.01	―	―	―	―