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cbdMD (YCBD)
XASE:YCBD
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cbdMD
(NYSE MKT:YCBD)
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Rating:48Neutral
Price Target:
$0.74
▼(-17.06% Downside)
Action:ReiteratedDate:02/21/26
The score is held back primarily by weak financial performance (ongoing losses, cash burn, and elevated leverage risk). The latest earnings call adds some support due to sequential revenue improvement, near-breakeven EBITDA, and added liquidity plus an acquisition-driven growth plan, while technicals and valuation remain mixed and provide limited additional support.
Positive Factors
Healthy Gross Margins
Sustained gross margins in the mid‑50s to mid‑60s provide structural product economics that can absorb promotional or mix shifts. If management controls SG&A and fulfillment costs, these margins create a durable path to operating leverage and support eventual EBITDA conversion as revenue stabilizes.
Sequential Revenue Recovery
Three straight quarters of quarter‑over‑quarter growth and recent monthly highs since 2022 show improving demand and channel execution. Durable sequential recovery across DTC and expanding wholesale share suggests the company can rebuild scale over the coming months if it sustains execution and integrates acquisitions effectively.
Improved Liquidity & Capital Options
Fresh financing and an equity line materially reduce immediate refinancing pressure, enabling integration of Bluebird assets and short‑term working capital needs. This stronger liquidity profile gives management time to execute cost discipline and synergy capture before cash burn dynamics force more dilutive measures.
Negative Factors
Extremely High Leverage
Debt extremely high relative to equity constrains strategic flexibility and increases vulnerability to interest or covenant stress. Over a multi‑month horizon this elevated leverage limits the company's ability to fund growth initiatives, absorb shocks, or pursue non‑dilutive investments without raising costly capital.
Persistent Negative Cash Flow
Ongoing cash burn means the business does not self‑fund operations or growth, making it reliant on external financing. This structural cash shortfall raises dilution and liquidity risk over 2–6 months if revenue momentum falters or planned synergies from acquisitions are delayed.
Multi‑Year Revenue Decline
A sustained multi‑year shrinkage in top line reduces fixed cost absorption and scale advantages, making margin recovery harder. Even with recent sequential gains, being below prior peaks implies the company must regain lost market share—an uncertain, multi‑period task that stresses profitability and cash flow.
cbdMD (YCBD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.90M
Dividend YieldN/A
Average Volume (3M)7.54M
Price to Earnings (P/E)―
Beta (1Y)0.74
Revenue Growth-1.50%
EPS Growth80.17%
CountryUS
Employees42
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.04
Shares Outstanding10,495,561
10 Day Avg. Volume860,286
30 Day Avg. Volume7,543,844
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)0.67
Price to Sales (P/S)0.25
P/FCF Ratio-2.97
Enterprise Value/Market Cap75.65
Enterprise Value/Revenue31.29
Enterprise Value/Gross Profit56.93
Enterprise Value/Ebitda-1.22K
Forecast
1Y Price Target
$2.00Price Target Upside122.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-0.22
Revenue Forecast (FY)$19.54M
cbdMD Business Overview & Revenue Model
Company DescriptioncbdMD, Inc. produces and distributes various cannabidiol (CBD) products. The company owns and operates consumer hemp-based CBD brands, such as cbdMD, Paw CBD, and cbdMD Botanicals. Its cbdMD brand products include CDB tinctures, gummies, topicals, capsules, bath bombs, bath salts, and sleep aids. It also offers veterinarian-formulated products, including tinctures, chews, and topicals under the Paw CBD brand name. The company distributes its products through its e-commerce Website, third-party e-commerce sites, wholesalers, and various brick and mortar retailers in the United States. It has a research partnership with the University of Mississippi to identify novel cannabinoids. The company was formerly known as Level Brands, Inc. and changed its name to cbdMD, Inc. in May 2019. cbdMD, Inc. was incorporated in 2015 and is headquartered in Charlotte, North Carolina.
How the Company Makes MoneycbdMD makes money primarily by selling hemp-derived CBD consumer products. Its core revenue stream is product sales through (1) direct-to-consumer channels—especially its company-operated e-commerce sites where it captures retail margin and can drive repeat purchases via promotions, bundles, and subscriptions/auto-ship programs (if offered)—and (2) wholesale/retail distribution where it sells product to third-party retailers, distributors, and other resellers at wholesale pricing. Revenue is recognized from the sale of finished goods (e.g., gummies, tinctures, topicals, capsules, and other CBD wellness items). Margins are influenced by product mix, ingredient/production and packaging costs, shipping and fulfillment costs (particularly for e-commerce), promotional discounting, and marketing spend. Information on specific, current material partnerships or licensing/endorsement arrangements contributing to earnings is null.
cbdMD Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call conveyed cautious optimism: management highlighted sequential revenue growth (12% QoQ), wholesale momentum (~17% increase), near-breakeven adjusted EBITDA (~$36K loss), a strategic acquisition (Bluebird Botanicals) expected to add revenue and IP, and improved liquidity via a ~$2.25M Series C and a $20M ELOC. Counterbalancing these positives are modest YoY revenue decline (~2%), gross margin compression (down 6 percentage points to 60%), a widened operating loss (~$286K), and ongoing regulatory headwinds that created customer confusion and added compliance costs. On balance, the operational progress, balance sheet improvements, and strategic acquisition slightly outweigh the challenges, supporting a constructive outlook while acknowledging execution and regulatory risks remain.Q1-2026 Updates
Positive Updates
Sequential Revenue Recovery
Net sales of approximately $5.0M in Q1 FY2026, marking a 12% sequential increase versus Q4 FY2025 and the company's third consecutive quarter of sequential revenue growth. December 2025 and January 2026 produced the highest monthly revenue levels since 2022, indicating improving top-line momentum.
Channel Mix and Wholesale Momentum
Direct-to-consumer remained the largest channel at ~72% of revenue while wholesale comprised ~28% of revenue and showed meaningful growth (~17% versus the prior quarter), reflecting improved execution in the core cbdMD brand and progress with the Oasis beverage brand.
Strategic Acquisition of Bluebird Botanicals
Completed the mid-January acquisition of assets of Bluebird Botanicals to add incremental revenue, a loyal customer base, valuable IP (including full-spectrum ‘grass’ status), and to broaden the wellness portfolio. Deal structured with limited upfront equity and performance-based earn-out; management expects integration to deliver cost and revenue synergies and a step function increase in revenue at attractive contribution margins.
Improved Capital Structure and Liquidity
Regained continued listing compliance and completed approximately $2.25M Series C preferred financing in December; ended the quarter with roughly $3.3–$3.4M in cash and ~$5.4M in working capital. Also established a $20M equity line of credit (ELOC) to opportunistically strengthen the balance sheet.
Per-Share Loss Improvement and Near-Breakeven EBITDA
Net loss attributable to common shareholders of approximately $325K, or $0.04 per share, versus a prior year net loss of ~$1.0M or $1.73 per share — a significant per-share improvement driven primarily by conversion of Series A preferred stock. Adjusted non-GAAP EBITDA loss was minimal at ~$36K, indicating trajectory toward positive EBITDA.
Cost & Operational Discipline
Management emphasized ongoing efforts to reduce fixed costs, simplify operations, and protect margins (focus on high-velocity SKUs and disciplined acquisition funnels). Expectation of extracting synergies from Bluebird integration and limiting working capital builds in the next quarter (excluding the acquisition).
Regulatory Advocacy & Positioning
Management is actively engaging with policymakers and industry groups (supporting HEMP Act) and participating in CBD-related federal programs (e.g., Medicare pilot program), positioning the company as a well-capitalized, compliance-focused operator with cGMP manufacturing and safety/clinical data as competitive advantages.
Negative Updates
Year‑over‑Year Revenue Slight Decline
Q1 FY2026 net sales of ~$5.0M vs $5.1M in the prior year quarter — a modest YoY decline of roughly 2%, indicating revenue remains below historical peaks despite sequential improvement.
Gross Margin Compression
Gross margin decreased to 60% from 66% in the prior year quarter (a 6 percentage point decline), attributed to higher warehouse expenses and a shift toward more wholesale sales and differing product mix/pricing.
Wider Operating Loss
Loss from operations increased to approximately $286K compared to a $86K loss in the prior year quarter (worsening by ~ $200K), reflecting margin pressure and operating expense dynamics despite progress elsewhere.
Operating Cash Use and Working Capital Build
Cash used in operating activities was approximately $812K in the quarter, including a $200K inventory investment, a $225K increase in prepaids (annual insurance/ERP), and an approximate $300K reduction in payables. Management noted the first fiscal quarter typically requires more working capital.
Regulatory Headwinds and Market Uncertainty
Restrictive hemp language in H.R. 5371 and recent regulatory changes caused packaging and appliance-related customer confusion, creating headwinds for sales. Ongoing regulatory uncertainty may continue to affect execution and incur compliance costs.
Top-Line Below Historical Peaks
Management acknowledged that revenue remains below historical highs, and while trends are improving, the company is not yet back to prior peak levels — highlighting the work remaining to fully restore scale.
Company Guidance
Management guided to continue driving sequential revenue improvement (Q1 net sales just over $5.0M, +12% sequentially and the third consecutive quarter of growth, with December 2025 and January 2026 the highest monthly levels since 2022), to integrate the mid‑January Bluebird Botanicals acquisition to capture cost and revenue synergies, and to maintain cost discipline and margin focus with the goal of achieving positive EBITDA (Q1 adjusted non‑GAAP EBITDA loss was $36k). They reiterated the channel mix (~72% DTC / 28% wholesale, with wholesale up ~17%), noted Q1 gross margin was 60% (down from 66% YoY), reported a loss from operations of ~$286k and a net loss attributable to common shareholders of ~$325k (≈$0.04 per share) versus a prior‑year net loss of ~$1.0M (≈$1.73 per share), and said they do not expect the same working‑capital build next quarter excluding the acquisition after Q1 operating cash use of ~ $812k (including ~$200k inventory build, ~$225k higher prepaids and a ~$300k reduction in payables). They emphasized balance‑sheet flexibility to execute the plan, citing approximately $3.3–3.4M in cash, ~$5.4M in working capital, a ~$2.25M Series C preferred financing completed in December and a $20M equity line of credit.cbdMD Financial Statement Overview
Summary
Financials remain weak: multi-year revenue decline, persistent operating/net losses, and consistently negative operating cash flow/free cash flow. Gross margins are relatively solid and losses/cash burn show some improvement, but the latest annual balance sheet indicates very high leverage risk (debt-to-equity ~108x), limiting flexibility.Income Statement
Revenue trends look weak on the annual record, with sales declining from 2021 through 2024 and only a slight dip again in 2025. Profitability remains the key issue: despite consistently solid gross margins (~56–67%), the company continues to post operating losses and net losses in every annual period shown, indicating overhead and operating costs are still too high relative to revenue. The TTM (Trailing-Twelve-Months) revenue figure and growth rate appear inconsistent with the annual history, so the score leans more heavily on the multi-year annual pattern of shrinking revenue and persistent losses.24
Negative
Balance Sheet
Leverage and equity quality are mixed. The latest annual period (2025) shows extremely high debt relative to equity (debt-to-equity ~108x), which is a major balance-sheet risk and suggests limited financial flexibility. Earlier years showed much lower leverage, but returns on equity are consistently negative across all periods, reflecting ongoing losses and weak value creation for shareholders. TTM (Trailing-Twelve-Months) shows low debt-to-equity, but given the sharp conflict versus the latest annual snapshot, the balance sheet is scored conservatively.28
Negative
Cash Flow
Cash generation is consistently negative: operating cash flow and free cash flow are below zero across all annual periods shown, indicating the business is not self-funding. While free cash flow is less negative in 2025 versus prior years (modest improvement trend), cash burn remains material and ongoing, and cash flow is not being supported by profitability (net income remains negative). The TTM (Trailing-Twelve-Months) cash flow figures are also negative, reinforcing the cash-burn profile.22
Negative
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.09M | 19.19M | 19.48M | 24.16M | 35.40M | 44.48M |
| Gross Profit | 10.50M | 10.84M | 10.85M | 13.04M | 20.50M | 28.97M |
| EBITDA | -489.19K | -366.67K | -1.37M | -6.34M | -14.34M | -17.36M |
| Net Income | -2.34M | -2.04M | -3.70M | -22.94M | -70.08M | -23.39M |
Balance Sheet | ||||||
| Total Assets | 11.78M | 10.42M | 10.58M | 16.20M | 40.79M | 124.88M |
| Cash, Cash Equivalents and Short-Term Investments | 3.39M | 2.26M | 2.45M | 1.80M | 7.72M | 27.44M |
| Total Debt | 593.03M | 778.24M | 1.27M | 3.68M | 4.87M | 6.07M |
| Total Liabilities | 2.77M | 3.19M | 8.62M | 7.16M | 9.37M | 21.74M |
| Stockholders Equity | 9.01M | 7.23M | 1.96M | 9.03M | 31.42M | 103.14M |
Cash Flow | ||||||
| Free Cash Flow | -165.96M | -1.64M | -642.81K | -4.60M | -15.66M | -16.44M |
| Operating Cash Flow | -1.95M | -1.45M | -352.79K | -4.30M | -14.97M | -14.09M |
| Investing Cash Flow | -184.59K | -184.17K | -290.01K | 702.45K | -688.68K | -2.55M |
| Financing Cash Flow | 3.55M | 1.45M | 1.30M | -1.32M | -4.04M | 28.23M |
cbdMD Technical Analysis
Negative
0.90
Price Trends
0.88
Negative
0.91
Negative
0.90
Negative
Market Momentum
-0.05
Positive
43.16
Neutral
25.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YCBD, the sentiment is Negative. The current price of 0.897 is above the 20-day moving average (MA) of 0.81, above the 50-day MA of 0.88, and below the 200-day MA of 0.90, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 43.16 is Neutral, neither overbought nor oversold. The STOCH value of 25.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YCBD.
cbdMD Risk Analysis
cbdMD disclosed 37 risk factors in its most recent earnings report. cbdMD 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
cbdMD Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | $373.25M | -37.95 | -1.45% | ― | 1.76% | 18.31% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | $809.72M | -3.44 | -114.12% | ― | 2.31% | -726.28% | |
48 Neutral | $7.90M | -10.73 | -40.66% | ― | -1.50% | 80.17% | |
46 Neutral | $39.54M | -4.80 | -199.09% | ― | -86.05% | 24.17% | |
40 Underperform | $3.04M | -0.89 | -93.87% | ― | -0.74% | 81.49% |
* Healthcare Sector Average
YCBD
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cbdMD Corporate Events
Business Operations and StrategyM&A Transactions
cbdMD Expands Portfolio with Bluebird Botanicals Acquisition
Positive
Jan 14, 2026
On January 12, 2026, cbdMD, Inc. acquired substantially all assets of Gaia Botanicals, LLC and its subsidiaries, including the Bluebird Botanicals brand, its online CBD marketplace and educational website, related trademarks, inventory and certain other assets, while assuming specified liabilities. The transaction, structured as an asset purchase, was paid for with 425,000 restricted common shares at closing and an earnout of up to 525,000 additional restricted shares subject to performance-based calculations, lock-up provisions and timing conditions, signaling cbdMD’s strategic expansion of its digital footprint, product portfolio and brand portfolio in the competitive CBD market, and potentially enhancing its market reach and positioning among online CBD retailers.
The most recent analyst rating on (YCBD) stock is a Hold with a $1.00 price target. To see the full list of analyst forecasts on cbdMD stock, see the YCBD Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.