KEY POINTS

  • Following Monday’s market close, Sundial Growers announced its Q1 results.
  • In this Q1 update, investors anticipate good news in the company’s results and guidance.

What’s going on with Sundial Growers stock

Sundial Growers shares were rising 21.1% higher at the market close on Monday. However, there was no news catalyst from the Canadian marijuana producer that might provide a boost to the share price.

However, following the market close Monday, Sundial Growers (NASDAQ:SNDL) is expected to reveal its first-quarter results. As a result, investors appear to be scrambling to get aboard before those numbers are released to avoid missing out on a significant profit.

Why we care

Outside investors should not be legally aware of the contents of Sundial’s Q1 update. An insider who knows what the firm will say cannot sell the marijuana stock. Thus, investors buying Sundial now are probably doing so owing to their optimistic views on the firm’s announcement.

There are a few reasons to be hopeful. For example, in the firm’s fourth-quarter report, Zach George, CEO of Sundial Growers, stated: “We are beginning to see positive momentum across all of our key operating segments and remain committed to our goal of becoming free cash flow-positive within the 2022 calendar year.” In addition, on March 31, 2022, Sundial bought Alcanna.

Neither of these factors will have an impact on Sundial’s Q1 performance. However, they might imply that the company’s full-year expectations will be greater than previously anticipated.

Delta 9 Cannabis (OTC:DLTNF) disclosed Q1 results ahead of the market open today, which may have offered a preview of Sundial’s results. Delta 9 CEO John Arbuthnot said that “supply chain issues and overall weakness in the Canadian cannabis market” held his firm back during Q1. He added, however, that management is still “bullish that the remainder of 2022 looks to be a promising year“. During the first quarter, Sundial invested $10 million in Delta 9 through a convertible debenture.

What now

Investors will have to review Sundial’s Q1 results. What the company says about expectations for the Canadian cannabis market through the rest of the year is even more important than the numbers from the first quarter.

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