NOVA CANNABIS INC (NOVC.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:NOVC - CA66980W1041 - Common Stock
1.75 CAD
0 (0%)
Overall NOVC gets a fundamental rating of 4 out of 10. We evaluated NOVC against 19 industry peers in the Specialty Retail industry. While NOVC seems to be doing ok healthwise, there are quite some concerns on its profitability. NOVC is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
- In the past year NOVC was profitable.
- In the past year NOVC had a positive cash flow from operations.
- In the past 5 years NOVC reported 4 times negative net income.
- The reported operating cash flow has been mixed in the past 5 years: NOVC reported negative operating cash flow in multiple years.
1.2 Ratios
- NOVC's Return On Assets of 2.32% is in line compared to the rest of the industry. NOVC outperforms 56.25% of its industry peers.
- Looking at the Return On Equity, with a value of 5.32%, NOVC is in line with its industry, outperforming 56.25% of the companies in the same industry.
- NOVC has a Return On Invested Capital of 7.21%. This is in the better half of the industry: NOVC outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.32% | ||
| ROE | 5.32% | ||
| ROIC | 7.21% |
ROA(3y)-8.27%
ROA(5y)-6.93%
ROE(3y)-17.5%
ROE(5y)-14.76%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- NOVC has a Profit Margin (1.14%) which is comparable to the rest of the industry.
- NOVC has a Operating Margin of 4.17%. This is comparable to the rest of the industry: NOVC outperforms 56.25% of its industry peers.
- In the last couple of years the Operating Margin of NOVC has grown nicely.
- Looking at the Gross Margin, with a value of 24.83%, NOVC is doing worse than 75.00% of the companies in the same industry.
- In the last couple of years the Gross Margin of NOVC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.17% | ||
| PM (TTM) | 1.14% | ||
| GM | 24.83% |
OM growth 3Y28.41%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-10.26%
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NOVC is destroying value.
- The number of shares outstanding for NOVC remains at a similar level compared to 1 year ago.
- Compared to 1 year ago, NOVC has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.85 indicates that NOVC is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of NOVC (2.85) is comparable to the rest of the industry.
- NOVC has a debt to FCF ratio of 5.15. This is a neutral value as NOVC would need 5.15 years to pay back of all of its debts.
- NOVC has a Debt to FCF ratio (5.15) which is in line with its industry peers.
- NOVC has a Debt/Equity ratio of 0.94. This is a neutral value indicating NOVC is somewhat dependend on debt financing.
- NOVC has a worse Debt to Equity ratio (0.94) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.94 | ||
| Debt/FCF | 5.15 | ||
| Altman-Z | 2.85 |
ROIC/WACC0.92
WACC7.88%
2.3 Liquidity
- A Current Ratio of 1.96 indicates that NOVC should not have too much problems paying its short term obligations.
- NOVC has a Current ratio of 1.96. This is in the better half of the industry: NOVC outperforms 75.00% of its industry peers.
- NOVC has a Quick Ratio of 1.07. This is a normal value and indicates that NOVC is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.07, NOVC is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.96 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
- NOVC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 155.95%, which is quite impressive.
- The Revenue has grown by 9.84% in the past year. This is quite good.
- Measured over the past years, NOVC shows a very strong growth in Revenue. The Revenue has been growing by 60.01% on average per year.
EPS 1Y (TTM)155.95%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-29.05%
Revenue 1Y (TTM)9.84%
Revenue growth 3Y60.01%
Revenue growth 5YN/A
Sales Q2Q%8.05%
3.2 Future
- NOVC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 45.10% yearly.
- Based on estimates for the next years, NOVC will show a quite strong growth in Revenue. The Revenue will grow by 14.38% on average per year.
EPS Next Y-26.32%
EPS Next 2Y45.1%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year5.23%
Revenue Next 2Y10.06%
Revenue Next 3Y13.72%
Revenue Next 5Y14.38%
3.3 Evolution
- The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
- NOVC is valuated quite expensively with a Price/Earnings ratio of 29.17.
- Compared to the rest of the industry, the Price/Earnings ratio of NOVC is on the same level as its industry peers.
- NOVC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 8.58, which indicates a very decent valuation of NOVC.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of NOVC indicates a rather cheap valuation: NOVC is cheaper than 81.25% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. NOVC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.17 | ||
| Fwd PE | 8.58 |
4.2 Price Multiples
- 62.50% of the companies in the same industry are more expensive than NOVC, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, NOVC is valued a bit cheaper than 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.23 | ||
| EV/EBITDA | 7.02 |
4.3 Compensation for Growth
- A more expensive valuation may be justified as NOVC's earnings are expected to grow with 45.10% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y45.1%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- NOVC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NOVA CANNABIS INC / NOVC.CA FAQ
What is the fundamental rating for NOVC stock?
ChartMill assigns a fundamental rating of 5 / 10 to NOVC.CA.
What is the valuation status of NOVA CANNABIS INC (NOVC.CA) stock?
ChartMill assigns a valuation rating of 5 / 10 to NOVA CANNABIS INC (NOVC.CA). This can be considered as Fairly Valued.
How profitable is NOVA CANNABIS INC (NOVC.CA) stock?
NOVA CANNABIS INC (NOVC.CA) has a profitability rating of 3 / 10.
What is the financial health of NOVA CANNABIS INC (NOVC.CA) stock?
The financial health rating of NOVA CANNABIS INC (NOVC.CA) is 5 / 10.