SHWZ - Schwazze (SHWZ) - Preliminary 1Q21 Revenue Results

Preliminary 1Q21 Results. Yesterday, Schwazze announced preliminary revenue for the first quarter of 2021 ended March 31st. Revenue grew approximately 503% to $19.3 million, with the increase largely attributable to the revenue associated with the acquisition of Mesa Organics and Star Buds. We had estimated revenue for the first quarter of $20.2 million. Including the Star Buds locations as if all had been acquired January 1, 2021, proforma revenue for the first quarter would have been $26.8 million.Star Buds Integration. Integration of the Star Buds locations is proceeding above expectations, including the synergies between the operating companies. Recall, management tripled Purplebees output and revenues, and there has been significant margin improvement in former Mesa retail dispensaries. This level of operating detail is being spread across the Star Buds chain and likely will result in an operation with which the Mom & Pops will have a difficult time competing, in our view.Earnings Release and Call. Management will host a call to discuss first quarter results on May 13th at 4:30pm ET. Dial-in is (201) 389-0879. We will provide commentary on the quarter and update our models following the call.Maintaining Outperform. We are maintaining our Outperform rating and $4.00 twelve month price target. At our price target, SHWZ shares would trade at 5x projected 2021 revenue and 18.6x projected 2021 EBITDA on a fully diluted basis. We recently conducted a C-Suite interview with Schwazze CEO Justin Dye and investors are encouraged to view the presentation on our www.channelchek.com portal. Read More >>