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On Tuesday, Benchmark analysts adjusted their financial outlook for Green Thumb Industries (OTC: OTC:GTBIF), reducing the price target from $10.00 to $7.00 while still maintaining a Buy rating on the shares. The revision followed Green Thumb’s first-quarter earnings for 2025, released on May 7, 2025, which showed revenues slightly below market expectations. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment, with analysts maintaining price targets ranging from $10 to $20.
The cannabis company reported a top-line revenue of $280 million, marginally missing the anticipated $284 million, but its Adjusted EBITDA of $85 million aligned with consensus estimates. Green Thumb’s ability to generate $74 million in operating cash flow was highlighted by the analysts, emphasizing the company’s continued focus on capital discipline and financial resilience. The company maintains strong profitability metrics, with a gross profit margin of 52.5% and positive earnings over the last twelve months. This comes amid challenges such as pricing pressures, increased retail competition, and a landscape of macroeconomic and regulatory uncertainties. Get deeper insights into Green Thumb’s financial health with a comprehensive Pro Research Report, available exclusively on InvestingPro.
Management at Green Thumb Industries addressed the likelihood of DEA rescheduling of cannabis, suggesting that it is not expected in the near term. They also pointed to potentially rising supply chain costs due to proposed tariffs on imported components, although these are subject to change as the situation evolves.
Despite the headwinds faced by the industry, Green Thumb’s strong balance sheet, with $211 million in cash and $258 million in working capital, was noted. The company’s financial position is believed to be robust enough to support ongoing investments, strategic mergers and acquisitions, and to provide a cushion against the ongoing volatility in the cannabis sector. InvestingPro data confirms this strength with a "GREAT" overall financial health score and a healthy current ratio of 2.38, indicating strong liquidity. Additionally, the company’s cash flows sufficiently cover interest payments, supporting its financial stability.
In other recent news, Green Thumb Industries has reported its fourth-quarter financial results for 2024, surpassing consensus expectations in both revenue and adjusted EBITDA. Despite facing sector-wide pricing pressures and regulatory uncertainties, the company has managed to achieve strong financial performance. Following these results, Benchmark analysts have revised their price target for Green Thumb shares, lowering it from $14.00 to $10.00, while maintaining a Buy rating. This adjustment reflects the challenges the cannabis sector is currently facing, though Benchmark notes Green Thumb’s robust cash flow and strategic investments as significant advantages. The analysts emphasize the company’s effective navigation of current market conditions, highlighting its ability to outperform consensus expectations. Benchmark is monitoring factors such as consumer demand trends and wholesale expansion efforts, which could influence Green Thumb’s future performance. The continued Buy rating from Benchmark indicates confidence in the company’s potential for growth and resilience in a competitive landscape.
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