IM Cannabis Corp. (NASDAQ: IMCC)

Sector: Healthcare Industry: Drug Manufacturers - Specialty & Generic CIK: 0001792030
Market Cap 3.26 Mn
P/B 1.14
P/E -1.15
P/S 0.09
ROIC (Qtr) -55.14
Div Yield % 0.00
Rev 1y % (Qtr) -1.68
Total Debt (Qtr) 12.73 Mn
Debt/Equity (Qtr) 4.43

About

IM Cannabis Corp., a company listed on the Nasdaq and CSE, is a leading international medical cannabis company operating in Israel and Germany. These two countries are among the world's largest federally legal cannabis markets, making IM Cannabis a significant player in this industry. The company generates revenue primarily through the sale of medical cannabis products in Israel and Germany. The company's main business activities involve the cultivation, production, and distribution of medical cannabis products. IM Cannabis operates in Israel,...

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Price action

Investment thesis

Bull case

  • Robust free cash flow of (2.64M) exceeds capital expenditure of (42028.99) by 62.93x, indicating strong organic growth funding capability.
  • Long-term investments of 1.26M provide solid 1.49x coverage of long-term debt 847826.09, indicating strategic financial planning.
  • Cash reserves of 1.68M provide solid 5.79x coverage of other non-current liabilities 289855.07, indicating strong liquidity.
  • Operating cash flow of (2.69M) provides strong 63.93x coverage of capital expenditure (42028.99), enabling organic growth.
  • Cash reserves of 1.68M provide comfortable 5.79x coverage of tax obligations 289855.07, showing strong fiscal management.

Bear case

  • With cash reserves of 1.68M against inventory of 7.26M, the 0.23 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • The company's operating cash flow of (2.69M) shows concerning coverage of stock compensation expenses of 13768.12, with a -195.16 ratio indicating potential earnings quality issues.
  • Operating cash flow of (2.69M) provides minimal -95.08x coverage of tax expenses of 28260.87, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 2.21M show weak coverage of depreciation charges of 1.43M, with a 1.54 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (2.64M) represents just -1.48x of debt issuance 1.78M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Drug Manufacturers - Specialty & Generic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ZTS Zoetis Inc. 56.15 Bn 21.18 5.98 7.27 Bn
2 TAK Takeda Pharmaceutical Co Ltd 48.92 Bn 221.13 1.66 36.24 Bn
3 HLN Haleon plc 46.13 Bn 25.59 3.29 -
4 TEVA Teva Pharmaceutical Industries Ltd 35.27 Bn 49.54 2.10 17.07 Bn
5 UTHR UNITED THERAPEUTICS Corp 21.76 Bn 17.11 6.95 0.00 Bn
6 VTRS Viatris Inc 14.87 Bn -4.03 1.05 14.44 Bn
7 NBIX Neurocrine Biosciences Inc 14.08 Bn 32.91 5.25 0.43 Bn
8 ELAN Elanco Animal Health Inc 11.64 Bn 323.29 2.54 4.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.27 24.98
EV to Cash from Ops. EV/CFO -3.17 -85.40
EV to Debt EV to Debt 0.67 265.88
EV to EBIT EV/EBIT 3.86 -32.65
EV to EBITDA EV/EBITDA -2.00 -29.50
EV to Free Cash Flow [EV/FCF] EV/FCF -3.22 -32.62
EV to Market Cap EV to Market Cap 2.61 -10.98
EV to Revenue EV/Rev 0.22 -700.14
Price to Book Value [P/B] P/B 1.14 27.22
Price to Earnings [P/E] P/E -1.15 -122.96
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.34
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.81
Dividend per Basic Share Div per Share (Qtr) 0.00 0.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.08
Interest Coverage Int. cover (Qtr) 0.44 -38.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 137.12 -157.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 16.57 44,776.25
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 139.74 24.45
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 52.64 18.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 138.89 37.66
EBT Growth (1y) % EBT 1y % (Qtr) 71.74 108.18
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 52.88
FCF Growth (1y) % FCF 1y % (Qtr) -230.80 -54.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 83.09 25.28
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.86 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.06 2.10
Current Ratio Curr Ratio (Qtr) 0.82 3.92
Debt to Equity Ratio Debt/Equity (Qtr) 4.43 -1.11
Interest Cover Ratio Int Coverage (Qtr) 0.44 -38.10
Times Interest Earned Times Interest Earned (Qtr) 0.44 -38.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.60 -62,432.09
EBIT Margin % EBIT Margin % (Qtr) 8.02 -63,260.88
EBT Margin % EBT Margin % (Qtr) -7.39 -66,726.96
Gross Margin % Gross Margin % (Qtr) 23.50 8,332.72
Net Profit Margin % Net Margin % (Qtr) -7.50 -66,728.37