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Greenlane (GNLN) Moves 29.7% Higher: Will This Strength Last?
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Greenlane Holdings (GNLN - Free Report) shares soared 29.7% in the last trading session to close at $5.31. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 28.4% loss over the past four weeks.
Shares of Greenlane Holdings got a boost as the company posted fourth-quarter 2020 results, wherein its core revenues advanced 11.3% and formed 93.4% of the total revenue – compared with 81.8% in the year-ago period. Also, Greenlane Brands net sales surged 50.5% in the quarter under review. Apart from this, investors appear optimistic about the company’s transformative merger announcement with KushCo Holdings, Inc., following which the latter will be a wholly owned subsidiary of the former.
Per the merger contract, shareholders of KushCo will receive about 0.2546 shares of Greenlane Class A common stock for every share of KushCo common stock. This is likely to result in KushCo and Greenlane shareholders owning roughly 49.9% and 50.1% of the combined company’s common stock, respectively. Notably, the merger is likely to lead to the establishment of a leading ancillary cannabis company, which can offer greater value to customers. Other benefits from the merger include an optimized platform with considerable possible synergies; scope for strong organic growth via cross selling; strengthened brand portfolio; enhanced innovations; along with better financial status to name a few.
On its fourth-quarter earnings call, management stated that the company remains focused on innovation and will continue catering to demands of the fast-changing Cannabis industry. The company remains committed toward enhancing revenue mix, optimizing organizational structure to curtail costs and utilize its solid distribution platform in order to introduce innovative products.
Price and Consensus
This distributor of vaporizers and smoking accessories is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of +18.2%. Revenues are expected to be $36.63 million, down 1.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Greenlane, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GNLN going forward to see if this recent jump can turn into more strength down the road.
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Greenlane (GNLN) Moves 29.7% Higher: Will This Strength Last?
Greenlane Holdings (GNLN - Free Report) shares soared 29.7% in the last trading session to close at $5.31. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 28.4% loss over the past four weeks.
Shares of Greenlane Holdings got a boost as the company posted fourth-quarter 2020 results, wherein its core revenues advanced 11.3% and formed 93.4% of the total revenue – compared with 81.8% in the year-ago period. Also, Greenlane Brands net sales surged 50.5% in the quarter under review. Apart from this, investors appear optimistic about the company’s transformative merger announcement with KushCo Holdings, Inc., following which the latter will be a wholly owned subsidiary of the former.
Per the merger contract, shareholders of KushCo will receive about 0.2546 shares of Greenlane Class A common stock for every share of KushCo common stock. This is likely to result in KushCo and Greenlane shareholders owning roughly 49.9% and 50.1% of the combined company’s common stock, respectively. Notably, the merger is likely to lead to the establishment of a leading ancillary cannabis company, which can offer greater value to customers. Other benefits from the merger include an optimized platform with considerable possible synergies; scope for strong organic growth via cross selling; strengthened brand portfolio; enhanced innovations; along with better financial status to name a few.
On its fourth-quarter earnings call, management stated that the company remains focused on innovation and will continue catering to demands of the fast-changing Cannabis industry. The company remains committed toward enhancing revenue mix, optimizing organizational structure to curtail costs and utilize its solid distribution platform in order to introduce innovative products.
Price and Consensus
This distributor of vaporizers and smoking accessories is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of +18.2%. Revenues are expected to be $36.63 million, down 1.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Greenlane, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GNLN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>