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OrganiGram Holdings (TSE:OGI)
TSX:OGI
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OrganiGram Holdings
(TSX:OGI)
52Neutral
Positive Factors
Financial Performance
Organigram reported a strong increase in EBITDA as a result of continued improving gross margins as well as lower operating expenses.
Market Expansion
Organigram announced its entry into the U.S. market through the acquisition of Collective Project Limited for upfront consideration of $6.2M.
Revenue Growth
By entering the U.S. through the hemp-derived THC market, which is regulated under the 2018 Farm Bill, OGI will be in a position to consolidate revenues from the U.S.
Negative Factors
Cash Reserves
The cash balance has decreased by approximately $55M as a result of the acquisition of Motif Labs and associated.
OrganiGram Holdings (OGI) vs. S&P 500 (SPY)
Market Cap
$179.28M
Dividend YieldN/A
Average Volume (3M)186.05K
Price to Earnings (P/E)―
Beta (1Y)1.61
Revenue Growth7.33%
EPS Growth84.41%
CountryCA
Employees1,093
SectorHealthcare
Sector Strength70
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)-0.52
Shares Outstanding126,255,750
10 Day Avg. Volume219,319
30 Day Avg. Volume186,050
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.25
Price to Cash Flow (P/CF)-19.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.22Price Target Upside126.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
OrganiGram Holdings Business Overview & Revenue Model
Company DescriptionOrganiGram Holdings Inc. is a leading licensed producer of cannabis and cannabis-derived products in Canada. The company operates within the pharmaceutical and recreational sectors, offering a wide range of products including dried cannabis flower, pre-rolls, cannabis oils, soft chews, and other edible products. OrganiGram is committed to producing high-quality, innovative cannabis solutions for both medical and adult-use consumers, leveraging advanced cultivation techniques and state-of-the-art facilities to ensure premium product offerings.
How the Company Makes MoneyOrganiGram Holdings generates revenue primarily through the sale of cannabis and cannabis-related products. The company offers a diverse portfolio of products that cater to both medical and recreational markets. Key revenue streams include the sale of dried flower, cannabis oils, and edibles such as chocolates and soft chews. OrganiGram also engages in wholesale transactions, supplying products to provincial cannabis boards and other licensed retailers across Canada. Additionally, the company explores strategic partnerships and international opportunities to expand its market reach and enhance its revenue potential. Factors such as regulatory changes, consumer trends, and product innovation significantly influence the company's earnings.
OrganiGram Holdings Financial Statement Overview
Summary
OrganiGram Holdings is facing a challenging financial landscape. While revenue has increased, profitability remains a significant issue, with negative net profit margins and ongoing losses. The balance sheet shows strength with a solid equity base, but cash flow challenges are evident with negative free cash flow growth and reliance on external financing.Income Statement
OrganiGram Holdings has shown a steady increase in revenue from 2020 to TTM, however, profitability remains a challenge. The gross profit margin improved to 26.56% in TTM, but the net profit margin is negative at -31.69%, indicating operational difficulties. The EBIT and EBITDA margins are also negative, reflecting ongoing losses, and suggest a need for cost management and strategic adjustments to reach profitability.45
Neutral
Balance Sheet
The balance sheet shows a strong equity position with an equity ratio of 67.55% in TTM, reflecting financial stability. However, the debt-to-equity ratio is low at 0.03, indicating minimal leverage, which is a positive sign. Return on equity remains negative due to net losses, underlining profitability pressures. The strong equity base provides a buffer, but profitability improvements are essential for better returns.60
Neutral
Cash Flow
Cash flows highlight significant challenges, with negative free cash flow growth and negative operating cash flow. The operating cash flow to net income ratio is below optimal levels, reflecting inefficiencies in converting revenue to cash. Despite a healthy influx of financing cash flow, reliance on external financing poses risks. Improvement in cash conversion and cost management is crucial for sustainable operations.40
Negative
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 166.12M | 159.84M | 149.21M | 145.81M | 79.16M | 86.80M | Gross Profit |
| 44.13M | 47.52M | 35.07M | 31.57M | -28.40M | -56.49M | EBIT |
| -40.45M | -35.67M | -242.74M | -38.75M | -91.82M | -145.51M | EBITDA |
| -13.91M | -23.59M | -207.62M | 12.33M | -95.59M | -121.47M | Net Income Common Stockholders |
| -52.65M | -45.44M | -229.48M | -14.28M | -132.55M | -136.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 72.61M | 107.57M | 33.86M | 98.91M | 183.84M | 74.73M | Total Assets |
| 331.78M | 407.86M | 298.45M | 577.11M | 554.02M | 417.62M | Total Debt |
| 118.00K | 4.46M | 4.72M | 3.36M | 4.96M | 103.67M | Net Debt |
| -71.69M | -102.29M | -29.15M | -65.16M | -50.40M | 79.07M | Total Liabilities |
| 59.98M | 101.87M | 26.83M | 69.05M | 74.21M | 118.10M | Stockholders Equity |
| 271.80M | 305.99M | 271.62M | 508.06M | 479.81M | 299.53M |
| Cash Flow | Free Cash Flow | ||||
| -12.31M | -1.47M | -62.70M | -84.99M | -40.92M | -123.78M | Operating Cash Flow |
| -7.28M | 3.87M | -35.80M | -36.21M | -28.59M | -45.13M | Investing Cash Flow |
| -102.67M | -38.77M | 1.35M | 44.03M | -115.11M | -138.20M | Financing Cash Flow |
| 107.73M | 107.78M | -817.00K | 5.33M | 174.46M | 160.37M |
OrganiGram Holdings Technical Analysis
Negative
1.42
Price Trends
1.67
Negative
1.94
Negative
2.15
Negative
Market Momentum
-0.09
Negative
44.93
Neutral
49.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:OGI, the sentiment is Negative. The current price of 1.42 is below the 20-day moving average (MA) of 1.45, below the 50-day MA of 1.67, and below the 200-day MA of 2.15, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 44.93 is Neutral, neither overbought nor oversold. The STOCH value of 49.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:OGI.
OrganiGram Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Performance Comparison
TSE:OGI
OrganiGram Holdings
1.42
-1.21
-46.01%
TSE:WEED
Canopy Growth
1.30
-8.29
-86.44%
TSE:ACB
Aurora Cannabis
5.93
-2.70
-31.29%
OrganiGram Holdings Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -43.20% | Next Earnings Date: Apr 15, 2025
Earnings Call Sentiment Neutral
Organigram demonstrated strong growth in market share and international sales, with effective new product launches and operational efficiency gains. However, challenges remain in the competitive edibles market and seasonal impacts on margins, along with an increased net loss due to accounting adjustments.Highlights
Strong Market Share Growth
Organigram expanded its national market share by 500 basis points year-over-year and 100 basis points sequentially. The company is now ranked number one in both the vapes and pre-rolls categories nationally.
Successful Product Launches
The Edison Sonics gummy saw strong demand, exceeding initial expectations and becoming a top 10 offering in markets like New Brunswick and BC.
International Expansion
International sales grew 2.3 times year-over-year to $3.3 million. Organigram anticipates further growth, particularly in Germany, with the upcoming EU GMP certification of the Moncton facility.
Operational Efficiency Improvements
The Winnipeg distribution optimization yielded $400,000 in annual savings. The Motif acquisition is expected to bring $10 million in annualized savings within 24 months, with early wins in manufacturing and sales.
Lowlights
Competitive Edibles Market
Organigram faced market share declines in the edibles category due to the influx of low-cost single-count gummies and price compression.
Seasonal Impact on Margins
The adjusted gross margin decreased from 37% to 33% sequentially, primarily due to seasonally lower volumes and competitive forces in the gummy category.
Increased Net Loss
Net loss for the quarter was $23 million compared to $15.8 million in the prior year, primarily due to a $18.9 million fair value loss related to BAT top-up rights.
Company Guidance
During the call, Organigram Holdings provided guidance for its fiscal 2025, highlighting several key metrics. The company reported a 17% increase in net revenue to $42.7 million compared to the same quarter last year, driven by strong performance from flagship brands SHRED and BOXHOT. Organigram expanded its national market share by 500 basis points year-over-year, achieving the number one position in both the vapes and pre-roll categories with significant market share gains. International sales increased 2.3 times year-over-year to $3.3 million, contributing to an adjusted gross margin of 33%. The company anticipates adjusted gross margin to stabilize around 35% for fiscal 2025. Additionally, Organigram expects to realize $10 million in annualized savings from the Motif acquisition within 24 months, with $5 million anticipated in fiscal 2025. The company also projects a positive cash flow from operations by the end of the fiscal year, supported by an international expansion strategy and increased flower output.OrganiGram Holdings Corporate Events
Delistings and Listing ChangesBusiness Operations and Strategy
Organigram Global Hosts Inaugural Investor Event and Announces Name Change
Positive
Apr 2, 2025
Organigram Global Inc. announced its inaugural virtual investor event, the OG Investor Session, scheduled for April 10, 2025. This event aims to provide investors with insights into the company’s growth strategy and innovation, featuring presentations from key executives. Additionally, the company has officially changed its name on the TSX and NASDAQ to ‘Organigram Global Inc.’ and will continue trading under the symbol ‘OGI’. This rebranding reflects Organigram’s commitment to innovation and market leadership in the cannabis industry.
M&A TransactionsBusiness Operations and Strategy
Organigram Expands into U.S. and Canadian Beverage Markets with Acquisition
Positive
Apr 1, 2025
Organigram has acquired Collective Project Limited, marking its entry into the U.S. hemp-derived THC beverage market and the Canadian cannabis beverage sector. This strategic acquisition allows Organigram to leverage Collective Arts’ brand strength and infrastructure, positioning itself to capitalize on the growing demand for alternative beverages as consumers shift away from alcohol. The move is expected to enhance Organigram’s market presence and revenue potential in both countries.
Private Placements and FinancingBusiness Operations and Strategy
Organigram Completes Strategic Investment to Boost International Growth
Positive
Mar 3, 2025
Organigram Holdings Inc. has completed the third and final tranche of a strategic equity investment from BT DE Investments Inc., a subsidiary of British American Tobacco, raising approximately USD$28.96 million. This investment is part of a larger C$124.56 million initiative to fund Organigram’s ‘Jupiter’ strategic investment pool, aimed at accelerating international growth and product differentiation amid challenging cannabis market conditions.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Organigram Holdings’ Strong Q1 Growth and Strategic Expansion
Positive
Feb 11, 2025
Organigram Holdings reported a 17% year-over-year increase in net revenue for Q1 Fiscal 2025, reaching $42.7 million. The company completed the acquisition of Motif Labs, strengthening its position as a market leader in Canada’s recreational cannabis sector. The integration of Motif is expected to yield over $10 million in annual run-rate synergies within 24 months. Organigram also launched Edison Sonics, utilizing proprietary FAST™ nanoemulsion technology for faster cannabinoid impact. With a strong balance sheet and negligible debt, the company continues to expand its market reach while maintaining its leadership in several cannabis product categories.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Organigram Holdings to Announce Q1 Fiscal 2025 Results
Neutral
Feb 4, 2025
Organigram Holdings has announced it will release its first quarter fiscal 2025 results on February 11, 2025, before the market opens. The company will also host a conference call to discuss these results, highlighting its commitment to transparency and engagement with stakeholders. The announcement may have implications for the company’s market positioning, especially following its recent acquisition of Motif Labs Ltd., which significantly enhances its processing capabilities in Southwestern Ontario.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.