Cannabis Chart Of The Week: EBITDA Expectations For Q3:23 And Full Year 2024 – Are Analysts Playing It Safe?
Portfolio Pulse from Viridian Capital Advisors
The article discusses the expectations for EBITDA growth among the largest MSOs in the cannabis industry for Q3:23, Q4:23, and the full year 2024. It highlights that sequential quarter growth was negative for ten out of twelve companies, with an overall projected EBITDA decrease of 5.9% from Q3 to Q4:23. However, year-over-year growth is expected to be stronger among smaller companies. The departure of major companies from several markets is noted, with a focus on concentrating on more profitable markets as a key driver for potential better-than-expected performance in 2024. The expected growth in 2024 EBITDA is 13.4%, driven by modest revenue growth and an increase in EBITDA margins. The article suggests that analysts might be underestimating the potential for 2024 due to continuous downward revisions in 2023.
February 26, 2024 | 6:41 pm
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POSITIVE IMPACT
AYR's departure from Arizona aligns with the industry trend of focusing on more profitable markets, which may lead to a positive surprise in 2024 performance.
AYR's exit from Arizona is part of a broader industry move towards concentrating on more profitable markets. This strategy, aimed at improving operational efficiency, could lead to a better-than-expected financial performance in 2024, potentially benefiting AYRWF's stock price in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Curaleaf's exit from California, Colorado, and Washington is seen as a move to focus on more profitable markets, potentially improving its 2024 outlook.
Curaleaf's decision to exit several markets is part of a strategy to focus on more profitable areas. This move is expected to contribute to a leaner operation poised for better-than-expected performance in 2024, potentially positively impacting CURLF's stock price in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Jushi is among the smaller companies expected to show significantly higher year-over-year growth, despite the overall group's aggregate growth being 7.2%.
Jushi's position as a smaller company with expected significant year-over-year growth suggests a positive outlook for its stock. The company's ability to outperform the sector's average growth rate could attract investor interest, potentially driving up its stock price in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Trulieve's departure from Massachusetts is part of a strategy focusing on more profitable markets, which could lead to a better-than-expected performance in 2024.
Trulieve's strategic market exits, including Massachusetts, are aimed at concentrating on more profitable markets. This move, part of a broader industry trend towards operational efficiency, could lead to a better-than-expected financial performance in 2024, potentially benefiting TCNNF's stock price.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Glass House is expected to see lower Q4 EBITDA due to less intense sunlight in winter, despite strong dispensary results in December.
The expected decrease in EBITDA for Glass House is directly related to the seasonal variation in sunlight, impacting greenhouse operations. This factor, combined with the overall negative trend for the sector, suggests a potential short-term negative impact on GLASF's stock price.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80