Agricultural Commodities/Milling · #24 in the Retail 100

SNDL

Pot stocks chase rescheduling headlines↑

Our rating: Not rated
Only two analysts publish estimates for SNDL, too few to form a real consensus to build a rating on.
12-month target: —
Expected vs. S&P 500: —
Next earnings: Mar 11In 126 daysEarnings calls page ↗

Half of SNDL's record C$20M quarterly free cash flow came from a one-time insurance unwind, while its cannabis production unit faces a strategic review.

Summary

SNDL, formerly Sundial Growers, runs hundreds of liquor and cannabis stores in Canada and makes cannabis products. It has no debt, but most of its cash pile is really loans to and investments in U.S. cannabis. Adjusted operating profit turned positive last quarter, helped by lower corporate costs, while the production unit lost money again and took a C$52M writedown. The stock depends on that unit being fixed or sold before it drains the cash.

$1.34

-$0.85 (-38.81%)Past year

What SNDL does

SNDL is mostly a Canadian store chain, earning nine-tenths of its revenue from liquor and cannabis shops. It also makes cannabis products and owns a large pile of cash and cannabis loans.^24,25

What it sells

Liquor stores57% of revenue, FY2025
Wine and Beyond, Ace Liquor and Liquor Depot stores, mainly in Alberta. Its biggest source of operating profit in 2025.
Cannabis stores35% of revenue, FY2025
Value Buds discount stores and franchised Spiritleaf shops. They earned C$30 million of operating profit in 2025.
Cannabis production8% of revenue, FY2025
Grows and packages cannabis for provincial wholesalers, export and its own stores, and now makes Jeeter pre-rolls under license. Slightly unprofitable in 2025.

Who buys it

Shoppers at its stores in five Canadian provinces, with liquor mainly in Alberta. The cannabis unit sells to provincial wholesalers, the government agencies that supply licensed stores. Its stores run gross margins near 26%, so SNDL is a low-margin retailer at heart.

Where you've seen it

A Liquor Depot or Ace Liquor store in Alberta, or a Value Buds or Spiritleaf cannabis shop in Canada.

The backstory

Canadians are buying less liquor and cannabis, and SNDL's thin-margin stores feel it. Management had blamed the production unit's losses on a temporary Jeeter pre-roll ramp-up, but the unit lost more last quarter, took a C$52M goodwill writedown (an accounting charge for overpaying) and exited unprofitable dried flower. Management is now cutting costs, reviewing the unit's future, and putting spare cash into buybacks and U.S. cannabis through SunStream.

How the business makes money

Why SNDL's store cash ends up in cannabis loans^26,27,28,29

Step 1
About 165 liquor stores, mainly in Alberta, bring in most revenue, and discount cannabis stores add a small profit.
Step 2
Store profits are thin, so falling sales hurt. Same-store sales fell 6.0% in liquor last quarter.
Step 3
Its own cannabis production lost C$11.4M on an adjusted basis last quarter and is now under strategic review.
Step 4
Spare cash goes into SunStream, its venture lending to U.S. cannabis companies. Most of SNDL's C$618M of cash and investments sits there.
What shareholders get
Spare cash also buys back shares, 5.4M last quarter, so each remaining share owns a larger slice.

Advantages

No debt and C$132M of cash

Strong advantage

SNDL's clearest strength. It has no debt and C$132.5M of cash, plus C$485.2M of cannabis investments, enough to fund buybacks and deals without borrowing.²⁶

A large store network

Strong advantage

Large, but its sales are shrinking. Counting 193 Canadian cannabis stores and Parallel's U.S. stores, SNDL says it supports the world's largest cannabis store network by count.^1,4,26

Canadian rights to Jeeter

Supporting

Promising, but costly so far. SNDL holds exclusive Canadian rights to make and sell Jeeter, a U.S. pre-roll brand, and its production unit lost money again.⁸

What's changing

Cutting production, owning more of Parallel

In the third quarter SNDL started a strategic review of its cannabis production unit, which could include selling assets. SunStream raised its indirect stake in Parallel, a U.S. medical cannabis operator, from about 67% to 92%. A deal with Ontario's regulator would remove about C$105M of annual franchise revenue from SNDL's books. Shareholders rejected a share consolidation on October 15.^26,29,30

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with SNDL Inc.
SNDL Inc.this stock	$326M	SNDL is mostly a Canadian store chain, earning nine-tenths of its revenue from liquor and cannabis shops. It also makes cannabis products and owns a large pile of cash and cannabis loans.
High TideHITI	$233M	Runs Canada's largest cannabis store chain, Canna Cabana, with low prices and paid memberships.	Both run stores; High Tide's sales held flat while SNDL's cannabis store sales fell 3.8%.^1,9,26
Tilray BrandsTLRY	$403M	Grows cannabis in Canada and Europe, and owns U.S. craft beer and spirits brands.	Tilray grows by buying brands like BrewDog; SNDL is shrinking but owns stores.¹⁰
Canopy GrowthCGC	$297M	Grows and sells cannabis in Canada, plus Storz and Bickel vaporizers worldwide.	Canopy only makes products; SNDL also owns the stores that sell them.¹¹
TrulieveTRLV	$2.08B	Runs Florida's leading medical cannabis dispensaries, with its own grows and brands.	Trulieve dominates Florida; SNDL's Parallel has far fewer stores there, 43 to 169.^4,12

Leadership

Who runs the company, and how the stock has done under the CEO.

SNDL -80.7%S&P 500 +61.8%Price change since Nov 2021, the earliest data available · log scale

20222023202420252026

Zach GeorgeCEO6.7 yrs, since 2020

Alberto Paredero-QuirosCFO3.3 yrs

Ryan HellardInterim President of Cannabis and Chief…7 mo

Wall Street on George: MixedAlliance Global Partners rates it a Buy but cut its price target to $3.50 from $5, citing softer sales, the cost of ramping up production and pressure on its stores after second-quarter revenue fell 3.7%.^L5,L6

Leadership sources (6) · researched Oct 2026

L1Sundial Announces Board of Directors and Executive Team Changes · SNDL Inc., 2020-01-30
L2SNDL Appoints New Chief Financial Officer · SNDL Inc. / Newswire.ca, 2023-06-06
L3SNDL Announces Leadership Transition for Cannabis Segment · SNDL Inc., 2026-03-30
L4SNDL (SNDL) Q1 2026 Earnings Transcript · The Motley Fool, 2026-04-29
L5SNDL Inc (SNDL) Q2 2026 Earnings Call Highlights: Strategic Moves Amid Market Challenges · GuruFocus / Yahoo Finance, 2026-07-28
L6SNDL (SNDL) Stock Forecast, Price Targets and Analysts Predictions · TipRanks, 2026-10-09

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will SNDL keep adjusted operating profit positive after last quarter's C$5.2 million, even though its cannabis production unit is losing money and under strategic review?^{26,27,28,30,29,4}

Bull case: why buyers buy

If the production cuts work and store margins hold, SNDL earns a steady profit and investors stop valuing it below the cash and investments it holds.

Both store chains set margin records. Each posted a 27.0% gross margin last quarter, and cannabis store revenue grew again.
Production costs are being cut. SNDL cut more than 30% of the Kelowna plant's workforce, and management expects the savings to start in the fourth quarter.
Buybacks keep shrinking the share count. SNDL has bought back 23.1M shares this year and may launch a C$50M tender offer (a company offer to buy shares from holders).
Adjusted operating profit turned positive. It was C$5.2M against a C$9.5M loss a year earlier, and free cash flow was C$20.0M.

Bear case: why sellers sell

If the production unit keeps losing money and store demand keeps falling, the cash pile goes to losses and U.S. bets that may not reach shareholders.

The production unit is getting worse. Revenue fell 27.7% and gross margin turned negative, with a non-cash C$52M writedown of its goodwill.
The profit gain came mostly from outside the stores. Lower corporate costs and investment gains drove it, while combined store operating profit was flat.
Store demand is still shrinking. Same-store sales (sales at stores open a year or more) fell 6.0% in liquor and 3.8% in cannabis.
The investment pile keeps growing in one place. Cannabis investments rose C$70.0M in the quarter, mostly SunStream, while cash fell to C$132.5M.

What to watch

The numbers that will settle the debate.

Adjusted operating profit▲ improving

A C$5.2M profit last quarter; still a C$10.7M loss for nine months²⁶

Shows whether the stores and factories earn money once one-time items are removed.

Cannabis production unit▼ worsening

Revenue down 27.7% and gross margin minus 6.0% last quarter^26,27

Shows whether the unit that tipped SNDL into losses is being fixed.

Liquor same-store sales▼ worsening

Down 6.0% last quarter; cannabis down 3.8%²⁶

Liquor is more than half of revenue, so its decline drives the total.

Next earnings report

Mar 11

In 126 days

Earnings calls page ↗

Expected earnings per share: $0.01
Expected revenue: —

What to listen for: Whether adjusted operating profit stays positive as the Kelowna cost cuts take effect, and what the production unit review decides.^26,28

What would prove this wrong

✕Adjusted operating profit turns negative again in the fourth quarter.
✕The strategic review ends with the production unit still losing money.
✕SunStream writes down the value of its loans or Parallel stake.
✕Liquor same-store sales keep falling by 5% or more.

Not ratedNo recommendation yet

Only two analysts publish estimates for SNDL, too few to form a real consensus to build a rating on.

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $1.27

Target $1.34

bull case20% likely

$1.66 +31%

The production cuts work, stores hold their record margins, adjusted operating profit stays positive, and investors value SNDL closer to its cash and investments.

$2.54 sales per share × 0.7 = $1.66

base case50% likely

$1.39 +9%

Sales fall to about C$840M a year as analysts expect, the business roughly breaks even, and buybacks continue.

$2.45 sales per share × 0.6 = $1.39

bear case30% likely

$1.04 -18%

Store and production sales keep falling, the review brings more writedowns, and losses and U.S. deals use up cash.

$2.37 sales per share × 0.4 = $1.04

Why these odds: Revenue is still falling and the production unit is worse, but adjusted profit turned positive and the buyback is large. Estimates come from two analysts, and 2027 sales are forecast below 2026. History reused from the earlier version.

How the prices are built: Wall Street expects sales per share of $2.45 for the year starting a year from now (analysts range from $2.28 to $2.63). Today the stock trades at 0.5 times next year's sales per share; its five-year middle is 0.71.^{26,33,34,35,36,37,18,28}

What tests the call: Q4 2026 earnings (date unconfirmed): whether adjusted operating profit stays positive (Mar 12)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 28; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $1.27, SNDL is cheaper than usual against its own sales

SNDL trades at 0.5 times the sales analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's sales. That is cheaper than it has been 80% of the time over the past five years, when the middle was 0.7.

Analysts expect sales to fall about 0% the year after.

SNDL multiple: 0.5×
Its usual multiple: 0.7×
Base case: +9%
Bear case: −18%

The skewOur bear case loses about $1.92 for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

Q3 2026 results, reported Oct 27

Adjusted operating profit turned positive at C$5.2M and free cash flow hit a record C$20.0M, but the production unit took a C$52M writedown and is under strategic review.^{26,27,29,30,36}

Reported Oct 27	Expected	Actual	Difference
Earnings per share	-$0.02	$0.01	+130.0%
Revenue	—	—	—

Beat expectations in 3 of the last 7 quarters

Stock reaction: +2.4% on the day of results (US$1.27 to US$1.30)

Why the stock moved

Up: adjusted operating profit improved C$14.8M from a year earlier to a C$5.2M profit, ahead of the Q2 loss.
Up: free cash flow reached a record C$20.0M, though the company had pre-announced about C$20M on October 15.
Down: the production unit's revenue fell 27.7% and a C$52M non-cash goodwill writedown drove the larger reported loss.
Mixed: free cash flow included a one-time C$10.6M insurance benefit, and no source ties the small move to one cause.

What it means for the stock: Mixed. Stores and cash generation held up, but the production unit's problems look larger than the temporary ramp-up management described in July, so the case rests on the strategic review.