Green Thumb Sees Consensus Estimate Fall To $49.89 After Q4 Earnings
Earlier this week, Green Thumb Industries (CSE: GTII) reported its fourth quarter financial results. The company reported sequential revenue growth of 4.2% to $243.6 million. The company reported flat gross profits of $128.64 million for the quarter and an adjusted EBTIDA of $76 million. The company also saw its net income grow 13% quarter over quarter to $22.81 or $0.01 earnings per share.
For the year, the company saw its revenue grow to $893.56 million, an increase of 60% year over year. The company also reported gross profits of $491 million and adjusted EBITDA of $307.8 million. The company reported net income of $75.4 million or $0.34 per share. The company had $230.4 million in cash and equivalents at the end of the year.
Green Thumb saw a number of analysts lower their 12-month price target, bringing the average price target to C$49.89, down from C$54.47 last month. There are 17 analysts covering the stock with 5 having strong buy ratings and the other 12 have buy ratings. The street high sits at C$73, which is a 225% upside to the current stock price.
In Canaccord’s fourth quarter review, they reiterate their buy rating but lower their 12-month price target from C$46 to C$43, applauding Green Thumbs’ performance under a challenging operating environment. The price target change comes after they made small downward adjustments to their 2022 estimates and added an additional risk premium to the stock due to macro-level headwinds.
For the quarterly results, Green Thumb beat Canaccord’s revenue and gross margin estimates of $235.4 million and $123.8 million, respectively. They note that their estimates were much more muted than prior. Though the company saw its adjusted EBITDA take a small hit but, “maintained what is still a healthy margin profile.” The revenue beat is attributed to new store openings in Illinois, Nevada, and Massachusetts.
Canaccord says that even though Green Thumb did not provide any forward-looking revenue guidance, their channel checks seem to suggest that the headwinds facing the company have persisted throughout the first quarter of 2022. Green Thumb’s biggest market, Illinois, saw a 15% month-over-month decline in January.
For the company’s gross margin dropping slightly to 52.8%, Canaccord says that this was expected and noted management has been experiencing CPG pricing pressures and that they expect the company to see gross margins of 50% or higher. As for the company’s adjusted EBITDA, which came in slightly below the company average margin prior at 31.2%, Canaccord says that this decline should be transitory as the sector should continue to see sustained growth and recent M&A will help re-accelerate the company’s fundamentals in 2022.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
