Wednesday, October 8, 2025

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Medipharm Labs Receives Price Target Reduction From Canaccord To $1.75

Yesterday, On November 16th, Medipharm Labs (TSX: LABS) reported their third quarter financial results. Reported revenues came in at $4.9 million, down 64.5% quarter over quarter and an 88.6% decline year over year. The company also reported a net loss of $15.3 million.

Canaccord Genuity’s Shaan Mir downgraded MediPharm Labs’ 12-month price target to C$1.75 from $2.50 and reiterated their speculative buy rating on the stock. He says that their results, “came in well behind our expectations as the company continues to navigate through an oversupply of bulk resin in the Canadian market.”

Canaccord’s revenue estimate was $14.5 million. He comments that there is a silver lining, which is their sales to provincial retailers which is up 30%, and says, “Management has undertaken initiatives to drive sales and expects to see top-line growth begin to re-accelerate in early 2021.”

MediPharm reported gross margins of -214%. Mir comments on this, stating that even if you back out the $6.3 million inventory write-down and the $1.5 million write-downs on non-current deposits, gross margin would still be ($2.8) million. He says, “Management has undertaken steps to bring down its costs subsequent to the quarter.” This includes reducing the headcount, which is perceived to save the company $3 million a year.

Onto MediPharm’s cash position, they ended the quarter with $36.5 million, which includes their recent $18.9 million raise. Mir believes that the company is well funded to meet its operational needs but notes, “that any delays in the commercialization of international contracts/onboarding of domestic white-labelling contracts may create the need for a capital injection in the near-to-medium term.”

Mir says that MediPharm is now moving away from bulk concentrate sales and is looking to leverage its PP&E towards finished goods offerings and that although he believes the company has the ability to compete in this segment, that “LABS may be challenged in securing cpg relationships as many of its peers have already carved out exposure in the space and its in-house brands may be perceived as competition by potential partners.”

With the price target downgrade, Mir has reduced full-year 2020 and 2021 forecasts, which you can find below.

Mackie Research’s Greg Mcleish also downgraded MediPharm from a buy to hold and now has a price target of $0.60 from $1.75 and called this quarter a disappointment.


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.

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