Thursday, August 28, 2025

Ayr Wellness: Cantor Halves Price Target On Weak Q1 Results

On May 26, Ayr Wellness (CSE: AYR.A) reported its first quarter financial results. The company reported flat quarter-over-quarter revenues at $111.2 million, while adjusted gross profits decreased 8.5% to $57.9 million this quarter. Adjusted EBITDA also saw a sequential decrease going from $26.1 million to $19.5 million. This brought the company’s adjusted EBITDA margin down from 23.3% last quarter to 17.5% this quarter.

The company reported a net loss of $7.57 million, or earnings per share of ($0.11). While the company ended the quarter with $78.66 million in cash and $96.69 million in current liabilities.

Ayr Wellness currently has 8 analysts covering the stock with an average 12-month price target of C$47.88, which represents a 480% upside to the current stock price. Out of the 8 analysts, 2 have strong buy ratings, 5 have buy ratings and a single analyst has a hold rating on the stock. The street high price target sits at C$55, or a 570% upside to the stock price.

In Cantor Fitzgerald’s note on the results, they reiterate their neutral rating on the stock but slash their 12-month price target on Ayr Wellness from C$13.30 to C$6.75, saying that the discount Ayr trades to its peers is justified. This is because they believe the elevated amount of debt, share-based compensation the company gives, and execution risk.

Additionally, Cantor says that with the multiple compression that has happened in the sector, coupled with federal news flow “being by far the main catalyst,” they are taking a lower-risk approach and prefer to recommend companies with a lower-risk approach and with better breadth/depth, more established operations, and stronger balance sheets.

For the results, Cantor says that they believe 5 states accounted for close to 95% of all sales and that the weighted blend was a 1.6% drop in revenue between the 5 states. The company’s gross margin decrease was primarily attributed to a weakness in the wholesale markets.

They add that financial net debt currently sits at $353 million, but if they include line items such as income taxes payable, deferred income taxes, earn-outs and leases, the net debt almost doubles to $690 million.

Lastly, they note that the company’s free cash flow outflow of $54 million this quarter was almost half of Ayr’s full-year cash flow outflow for 2021. Though management spoke to the idea that the first half of 2022 is front-loaded with capex and the company stockpiled inventory during the first quarter.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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