Green Thumb Industries Still Among 'Best-Managed MSOs,' Analyst On What To Expect From Q4 Earnings

Cannabis consumer packaged goods company Green Thumb Industries Inc. GTII GTBIF will report its fourth-quarter financials on Tuesday. Cantor Fitzgerald's analyst Pablo Zuanic discussed his expectations in a recent note.

As with other operators in the space, price deflation and wholesale market erosion will negatively affect the gross figures reported by a company concerning revenues and sales, said Zuanic who is a speaker at the April Cannabis Capital Conference in Miami.

The Analyst

Zuanic retained an "Overweight" rating on the company's stock while lowering his 12-month price target to $32 from $36.

The Thesis

Even though Green Thumb is still one of Zuanic's top stock picks, he reduced estimates for the quarter though says he expects the company to benefit from trends evidenced in the states where it operates.

Benefits from the launch of cannabis sales in Rhode Island, expansion of medical marijuana sectors in Maryland and Virginia and maturing of New Jersey's cannabis market should be visible in the first quarter of 2023, Zuanic said.

He expects a "-1% seq growth to $258Mn (FactSet consensus is at $257Mn)" for the fourth quarter.

"We continue to believe Green Thumb is arguably among the best-managed MSOs if we go by balance sheet strength, EBITDA/operating cash flow conversion, and profit margins (for a large footprint)," the analyst concluded.

Price Action

GTI's shares were trading 0.47% lower at $8.48 per share at the time of this publication on Monday morning.

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