Benzinga - by Nicolás Jose Rodriguez, Benzinga Staff Writer.
Green Thumb Industries Inc. (OTC: GTBIF) is ramping up investments across Minnesota, Ohio, Virginia, Florida and Pennsylvania to gear up for recreational marijuana legalization. It is also expanding its wholesale market share in Illinois, Maryland and Pennsylvania.
Financial Health And Strategic Moves
Pablo ZuanicZuanic & AssociatesWith a plan to utilize the remaining $60 million for share buybacks and to repurchase part of its $225 million debt at a discount, the company aims to solidify its financial standing. The easing of its heavy capital expenditure cycle indicates a move towards leveraging its cash flow more effectively.
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Valuation And Growth Potential
When compared to the broader MSOS ETF and the S&P 500, Zuanic notes Green Thumb's performance.
The company's stock currently trades at 2.7 times the FactSet consensus CY24 sales and 8.8 times EBITDA, above the multi-state operator (MSO) average.
This valuation indicates Green Thumb's premium market position, with stock prices exceeding industry averages based on projected sales and earnings, reflecting investor confidence in its growth prospects and operational efficiency.
This premium is deemed justifiable by Zuanic, given the company's scale, consistent performance and strong financial metrics.
Sector Catalysts And Future Outlook The cannabis sector awaits significant catalysts such as rescheduling and the SAFER Banking Act. However, the lukewarm mention of cannabis in the State of the Union speech suggests a conservative stance from the Biden administration.
According to Zuanic’s report state-level developments, particularly the start of recreational sales in five key states, could serve as more immediate catalysts.
Investors' Cannabis Compass Investors may find it beneficial to monitor companies well-positioned to leverage new recreational marijuana markets in states like Minnesota, Ohio, Virginia, Florida and Pennsylvania, considering their growth potential.
Additionally, keeping an eye on legislative changes at both state and federal levels, such as cannabis rescheduling or banking reforms, is crucial for timely investment decisions in this volatile sector.
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Photo: AI-Generated Image.
Latest Ratings for GTBIF
| Mar 2022 | Needham | Maintains | Buy | |
| Feb 2022 | Cantor Fitzgerald | Maintains | Overweight | |
| Jan 2022 | Wolfe Research | Initiates Coverage On | Outperform |
View the Latest Analyst Ratings
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