Gold prices steady ahead of Fed decision; weekly weakness noted
On Wednesday, TILT Holdings Inc. (TILT:CN) (OTC: SVVTF) stock, a company operating in the cannabis sector, was downgraded from Overweight to Neutral by Zuanic and Associates, a change reflecting concerns over the company's financial and operational progress.
The downgrade comes as the firm observes challenges in TILT's vape hardware and plant-touching divisions, noting that the company's debt levels are higher than anticipated.
The analyst cited several reasons for the adjustment in stance, including a lack of progress in earnings before interest, taxes, depreciation, and amortization (EBITDA) within TILT's two main divisions, as well as uncertainty surrounding the evolving business model of Jupiter, TILT's vape hardware unit.
Despite these concerns, the analyst acknowledged that TILT's valuation remains attractive, trading at 0.8x calendar year 2024 enterprise value to sales (EV/sales), compared to 1.9x for the multi-state operator (MSO) group average.
However, the absence of near-term catalysts, combined with below-average margins and a significant debt load, were cited as reasons justifying the current valuation discount. The analyst also pointed out the ongoing difficulties within the vape hardware division as contributing factors to the more cautious outlook.
The possibility of Smoore Holdings purchasing the Jupiter business was mentioned as a potential upside for TILT Holdings. Yet, the lack of clarity regarding if or when such a transaction might occur, as well as the terms of any hypothetical deal, were not deemed sufficient to recommend a more active investment stance at this time.
The analyst's comments reflect a measured approach, prioritizing observable financial metrics and business model stability over speculative future developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.