The rapid growth of the cannabis industry, buoyed by progressive legalization efforts and an expanding market, is accelerating the upside of companies like Green Thumb Industries (GTBIF), a multi-state operator specializing in cannabis-based products. With federal-level legalization discussions, the rise in recreational use—legal in 24 states and counting, with Florida’s Amendment 3 putting the state in play this November—is predicted to fuel significant growth and make the green plants bloom profitably.
The stock is up 60% in the past year, with potential room to run. Investors interested in cannabis stocks might find this a compelling option.
Green Thumb’s Growing Footprint
Green Thumb Industries is a leading national cannabis packaged goods company and retailer. Among its varied portfolio are branded cannabis products such as &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredible, and RYTHM. Additionally, Green Thumb operates a fast-expanding retail cannabis store network, RISE. The company operates across 14 U.S. markets, with 20 manufacturing facilities and 97 retail locations.
Recently, the company has made significant strides in its business development. During the second quarter, it opened two new RISE dispensaries in Florida. Furthermore, after the quarter’s end, three additional RISE dispensaries were launched in Florida and New York, and the company is set to commence legal sales at five RISE dispensaries in Ohio, which will kick off on August 6.
Green Thumb’s Recent Financial Results
The company recently reported financial results for Q2. Revenue of $280.15 million exceeded analysts’ expectations of $277.24 million while marking 11% year-over-year growth. This significant growth is attributed to increased retail and consumer packaged goods sales, 11 additional RISE Dispensaries, and adult-use sales in Maryland. Gross profit for the quarter was $150.5 million, 53.7% of the total revenue, showing a 4.1% growth from the previous year.
Total expenses rose from $84.2 million in 2023 to $96.5 million in 2024 due to higher costs related to new store openings and salaries. Net income was $20.7 million, a year-over-year increase from $13.4 million. Furthermore, EBITDA for the quarter was $82.0 million, a 24.6% rise from $65.3 million in 2023. Earnings per share (EPS) of $0.09 exceeded analysts’ predictions of $0.05.
As of quarter-end, the company reported current assets of $403.8 million, including cash and cash equivalents amounting to $196.1 million. The total debt standing was reported as $309.7 million.
What Is the Price Target for GTBIF Stock?
The stock is volatile, with a beta of 1.51, and has been range-bound year-to-date. It trades near the middle of its 52-week price range of $6.42 – $16.33 and shows negative price momentum, trading below the 20-day (11.27) and 50-day (11.65) moving averages. With an EV to EBITDA of 7.39, the company is relatively undervalued compared to the Specialty & Generic Drug Manufacturers industry, where the average EV to EBITDA ratio is 13.77.
Analysts covering the company have been bullish on the stock. For instance, Needham analyst Matt McGinley recently reiterated a Buy rating on the shares with a price target of $17.00, noting the company’s robust recent financial performance, the strength of its balance sheet, growing profitability, and operational efficiency.
Overall, Based on the recommendations and price targets assigned by eight analysts, Green Thumb Industries is rated a Strong Buy. The average price target for GTBIF stock is $19.59, representing a potential upside of 74.91% from current levels.
See more GTBIF analyst ratings
Final Thoughts on Green Thumb
Green Thumb Industries, with its significant footprint in the burgeoning cannabis industry, is well-positioned to participate in the promising future of the cannabis market and its ever-growing legalization across the U.S. The company shows significant potential upside, and the stock trades at a relative discount, making it a compelling option for cannabis-oriented investors.
