Sundial Growers (SNDL) Stock Fell To 13 Cents During COVID Pandemic — How Much Is A $1,000 Investment At The Low Worth Now?

Investors who bought stocks during the COVID-19 market crash in 2020 have generally experienced some big gains in the last two years. But there is no question some big-name stocks performed better than others since the pandemic bottom.

Sundial Growers' Bumpy Ride: One company that has been a volatile investment in the past two years is Canadian cannabis company SNDL Inc SNDL, previously known as Sundial Growers. 

Sundial battled a difficult Canadian cannabis market throughout 2020.

At the beginning of 2020, Sundial shares were trading at around $3.10. By the beginning of March, the stock was down to $1.44 after news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.

Sundial bottomed at 51 cents during the pandemic-driven sell-off in March 2020. Fortunately for investors, the selloff didn’t last long. By June, Sundial shares made it back up above $1, but the rally stalled at that point until the November U.S. presidential election. Sundial shares ultimately reached their 2020 pandemic bottom when the stock hit 13.8 cents on Oct. 30, 2020.

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A victory by Democrat Joe Biden in November 2020 and a surprise blue wave giving Democrats control of both the Senate and House sent cannabis stocks soaring on optimism that U.S. cannabis legalization may be just around the corner.

Sundial traded as high as $3.96 in February 2021 during a retail investor-fueled short squeeze.

Unfortunately, a lack of progress on U.S. legalization and more lackluster growth numbers from the Canadian cannabis market made 2022 another difficult year for cannabis stocks. As Sundial's revenue has grown, so too has its net losses, continuing a cycle of cash burn and share offerings.

During the first half of 2021 alone, Sundial issued more than 1 billion new common shares to raise cash.

Sundial shares have been drifting steadily lower since February 2021. In July 2022, Sundial shareholders approved a 10-to-1 reverse stock split for the company so it could maintain its listing on the Nasdaq. Shareholders also approved a rebranding initiative that renamed the company SNDL Inc.

SNDL in 2023, Beyond: To make matters worse, Republicans recaptured the House of Representatives in the November 2022 election, potentially closing the window of opportunity for federal U.S. cannabis legalization. At this point, SNDL shares have traded all the way down to $2.30, opening up the possibility of another reverse stock split down the line if the company doesn't get its business on the right track.

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At this point, investors who bought Sundial on the day it hit its pandemic low and held on are among the few that have made money on the stock in recent years. In fact, $1,000 in SNDL stock bought on Oct. 30, 2020, would be worth about $1,603 today.

Looking ahead, analysts are expecting SNDL stock to rebound in the next 12 months. The average price target among the four analysts covering the stock is $3.46 cents, suggesting 50.5% upside from current levels.

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