Stenocare A/S cultivates, produces, imports, sells, and distributes prescription-based medical cannabis products in the Danish and European markets. It offers medical cannabis oil products. Stenocare A/S was incorporated in 2017 and is based in Randers, Denmark.

Denmark

Stenocare A/S

Healthcare

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

STENO.CO reported revenue of DKK 2mn in the last 12 months, down 44% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 4% from FY23 to DKK -1.26. Market expects EPS to reach DKK 0.00 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 63ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -1080.5% in the last 12 months, a decline from -312.4% in FY23. 

Historically, STENO.CO has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -1545.1%, down from -440.0% in FY23. 

Stenocare A/S reported a return on equity (RoE) of -308.6% in the last 12 months, down from -70.3% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -119.3% in the last 12 months, a decrease from -45.2% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -177.0%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -7.3 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

STENO.CO has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is very high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, inadequate interest coverage, poor cash flow generation, and an unfavourable capital structure.

In highly turbulent market conditions, STENO.CO is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, STENO.CO is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. 

Stenocare A/S

DKK 0.33

2

Stenocare A/S

DKK 0.33

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

DKK 0.33

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