Nova Cannabis (TSX:NOVC) - Share price, News & Analysis

NOVC fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	0/6
Financial Health	2/6
Dividends	0/6

NOVC Stock Overview

Nova Cannabis Inc. engages in the operation of retail cannabis stores with a focus on the recreational-use cannabis market in Canada.

Rewards

Revenue is forecast to grow 57.08% per year

Risk Analysis

Earnings have declined by 32.2% per year over past 5 years

Has less than 1 year of cash runway

Volatile share price over the past 3 months

Does not have a meaningful market cap (CA$42M)

Nova Cannabis Competitors

ShinyBud

TSXV:SNYB

CA$19.7m

PesoRama

TSXV:PESO

CA$15.8m

Indigo Books & Music

TSX:IDG

CA$99.8m

Fire & Flower Holdings

TSX:FAF

CA$109.2m

Price History & Performance

Summary of all time highs, changes and price drops for Nova Cannabis
Historical stock prices
Current Share Price	CA$0.73
52 Week High	CA$4.42
52 Week Low	CA$0.65
Beta	0
1 Month Change	-34.82%
3 Month Change	-67.12%
1 Year Change	-74.83%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-75.91%

Shareholder Returns

	NOVC	CA Specialty Retail	CA Market
7D	12.3%	-2.1%	-1.2%
1Y	-74.8%	-22.1%	-4.5%

Return vs Industry: NOVC underperformed the Canadian Specialty Retail industry which returned -23.2% over the past year.

Return vs Market: NOVC underperformed the Canadian Market which returned -5% over the past year.

Price Volatility

Is NOVC's price volatile compared to industry and market?
NOVC volatility
NOVC Average Weekly Movement	14.8%
Specialty Retail Industry Average Movement	6.2%
Market Average Movement	10.1%
10% most volatile stocks in CA Market	17.5%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: NOVC is more volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 15% a week.

Volatility Over Time: NOVC's weekly volatility (15%) has been stable over the past year, but is still higher than 75% of Canadian stocks.

About the Company

Founded	Employees	CEO	Website
n/a	548	Marcie Kiziak	https://www.novacannabis.ca

Nova Cannabis Inc. engages in the operation of retail cannabis stores with a focus on the recreational-use cannabis market in Canada. As of March 31, 2022, the company operated 78 cannabis stores in Alberta, Ontario, and Saskatchewan. The company is headquartered in Edmonton, Canada.

Nova Cannabis Fundamentals Summary

How do Nova Cannabis's earnings and revenue compare to its market cap?
NOVC fundamental statistics
Market Cap	CA$41.72m
Earnings (TTM)	-CA$21.92m
Revenue (TTM)	CA$165.80m

0.3x

P/S Ratio

-1.9x

P/E Ratio

Is NOVC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NOVC income statement (TTM)
Revenue	CA$165.80m
Cost of Revenue	CA$136.34m
Gross Profit	CA$29.46m
Other Expenses	CA$51.38m
Earnings	-CA$21.92m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.38
Gross Margin	17.77%
Net Profit Margin	-13.22%
Debt/Equity Ratio	8.2%

How did NOVC perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is NOVC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NOVC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NOVC. This is calculated by dividing NOVC's market cap by their current preferred multiple.
What is NOVC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$41.72m

NOVC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.6x
Enterprise Value/EBITDA	-10.5x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does NOVC's PS Ratio compare to its peers?

NOVC PS Ratio vs Peers

The above table shows the PS ratio for NOVC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.8x
SNYB ShinyBud	0.8x	n/a	CA$19.7m
PESO PesoRama	1.6x	n/a	CA$15.8m
IDG Indigo Books & Music	0.09x	1.1%	CA$99.8m
FAF Fire & Flower Holdings	0.6x	18.4%	CA$109.2m
NOVC Nova Cannabis	0.3x	57.1%	CA$41.7m

Forward PS

Price-To-Sales vs Peers: NOVC is good value based on its Price-To-Sales Ratio (0.3x) compared to the peer average (0.8x).

Price to Earnings Ratio vs Industry

How does NOVC's PE Ratio compare vs other companies in the North American Specialty Retail Industry?

Price-To-Sales vs Industry: NOVC is good value based on its Price-To-Sales Ratio (0.3x) compared to the Canadian Specialty Retail industry average (0.6x)

Price to Sales Ratio vs Fair Ratio

What is NOVC's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NOVC PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.3x
Fair PS Ratio	3.1x

Price-To-Sales vs Fair Ratio: NOVC is good value based on its Price-To-Sales Ratio (0.3x) compared to the estimated Fair Price-To-Sales Ratio (3.1x).

Share Price vs Fair Value

What is the Fair Price of NOVC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: Insufficient data to calculate NOVC's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate NOVC's fair value for valuation analysis.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NOVC's PEG Ratio to determine if it is good value.

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Future Growth

How is Nova Cannabis forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

57.1%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if NOVC's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if NOVC's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if NOVC's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NOVC's revenue (57.1% per year) is forecast to grow faster than the Canadian market (6.5% per year).

High Growth Revenue: NOVC's revenue (57.1% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if NOVC's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Nova Cannabis performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-32.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NOVC is currently unprofitable.

Growing Profit Margin: NOVC is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: NOVC is unprofitable, and losses have increased over the past 5 years at a rate of 32.2% per year.

Accelerating Growth: Unable to compare NOVC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NOVC is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (47.3%).

Return on Equity

High ROE: NOVC has a negative Return on Equity (-39.69%), as it is currently unprofitable.

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Financial Health

How is Nova Cannabis's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: NOVC's short term assets (CA$19.4M) exceed its short term liabilities (CA$15.2M).

Long Term Liabilities: NOVC's short term assets (CA$19.4M) do not cover its long term liabilities (CA$46.3M).

Debt to Equity History and Analysis

Debt Level: NOVC has more cash than its total debt.

Reducing Debt: Insufficient data to determine if NOVC's debt to equity ratio has reduced over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NOVC has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: NOVC has less than a year of cash runway if free cash flow continues to reduce at historical rates of 93.7% each year

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Dividend

What is Nova Cannabis's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate NOVC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NOVC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NOVC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NOVC's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as NOVC has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

0.3yrs

Average board tenure

CEO

Marcie Kiziak (42 yo)

0.33

Tenure

CA$417,568

Compensation

Ms. Marcie Catherine Kiziak served as Chief Operating Officer at Nova Cannabis Inc. since March 22, 2021 until March 2022 and serves as its President and Chief Executive Officer since March 31, 2022. She a...

CEO Compensation Analysis

Compensation vs Market: Marcie's total compensation ($USD324.04K) is above average for companies of similar size in the Canadian market ($USD191.19K).

Compensation vs Earnings: Insufficient data to compare Marcie's compensation with company performance.

Board Members

Experienced Board: NOVC's board of directors are not considered experienced ( 0.3 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: NOVC insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/04 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31