Clever Leaves (CLVR) Stock Spiked 36% Higher on Earnings. What’s Next?

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Simon Mugo
Updated: 25 Mar 2022

Key points:

  • Clever Leaves shares spiked 36% after its Q4 and FY 2021 results.
  • Investors bought its shares despite its losses due to its prospects.
  • In addition, the company’s management gave an upbeat 2022 outlook.

The Clever Leaves Holdings Inc (NASDAQ: CLVR) stock price rallied 36% higher after releasing its Q4 and FY 2021 earnings results yesterday after the markets closed. Today’s rally builds on the 27.4% rally registered yesterday in anticipation of the company’s positive results.

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The company which produces pharmaceutical-grade cannabinoids revealed that its Q4 revenues surged 25% to $4.2 million compared to $3.3 million recorded in Q4 2020. However, despite the higher revenues, Clever Leaves sunk into a $300,000 loss compared to the $2.3 million gross profit recorded in Q4 2020.

Also read: The Five Best Starter Stocks For Beginners in 2022.

Clever Leaves attributed the loss to a $3 million inventory write-down. However, its non-GAAP gross profits remained unchanged at $2.7 million.

The cannabis company’s full-year revenues surged 27% to $15.4 million versus the $12.1 million generated in 2020. The company’s costs per gram of dry flower rose to $0.22, compared to 2020’s $0.14 in 2020, driven primarily by the $0.47 cost recorded in Q4.

The company’s gross profits fell to $6.8 million compared to the $7.4 million recorded in 2020 due to the $3 million inventory write down.

Clever Leaves' net losses surged to $45.7 million compared to $25.9 million in 2020 due to an $18.5 million non-cash goodwill impairment charge, an $11.5 million non-cash share-based compensation expense, and higher charges related to hiring professionals to meet its obligations as a public company.

Interestingly, investors were unbothered by the high share-based compensation for its top executives even though it was still a loss-making entity.

Andres Fajardo, Clever Leavess’ President and incoming CEO, said: “We have made progress in the fourth quarter by strengthening our operational foundation and advancing our commercial momentum to better position us for 2022. We delivered year-over-year revenue growth of 26% and 29% across our non-cannabinoid and cannabinoid businesses, respectively. We also maintained our prudent approach to cost management as we drove continued production efficiencies. We believe the incremental milestones we achieved throughout our first year as a public company will enable us to leverage our low-cost production advantages and advance our global distribution efforts in 2022.”

Clever Leaves completed the expansion of its cultivation facility in Portugal during Q3 2021. In December, they were given a license by the Portuguese regulatory health authority, INFARMED, I.P., for the expanded facility.

The cannabis company has promising prospects, so investors are buying its shares despite its massive losses.

*This is not investment advice. Always do your due diligence before making investment decisions.

Clever Leaves stock price.

Clever Leaves Holding stock price 25-03-2022
Source: Tradingiew

Clever Leaves Holdings stock was up 36.07% to trade at $2.15, rising from Thursday’s closing price of $1.58.

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