
Its second quarter numbers are in the books and Haywood analyst Neil Gilmer remains more than bullish on Rubicon Organics (Rubicon Organics Stock Quote, Chart, News, Analysts, Financials TSXV:ROMJ).
On August 16, ROMJ reported its Q2, 2023 results. The company posted Adjusted EBITDA of $1.77-million on revenue of $11.28-million, a topline that was up 28 per cent over the same period last year.
“I’m pleased to share that Rubicon Organics has achieved another record quarter of net revenue, a 28% increase year-on-year, delivering our fifth consecutive quarter of positive Adjusted EBITDA and fourth consecutive quarter of positive operating cashflow,” said CFO and interim CEO Margaret Brodie. “Our focus remains on further establishing a leading presence in the premium cannabis market and, through extensive due diligence, to work with high-quality partners to complement our own premium production to achieve our long term-strategy. We expect to see the ramping up of supply from these partnerships to leverage the strong demand of our brands beginning in Q4 2023.”
Gilmer characterized the quarter.
“Rubicon reported Q2/23 net revenue of $11.3M, a YoY increase of 28%, above our estimate of $10.6M,” he noted. Adjusted gross profit before fair value adjustments was $4.6M, representing a margin of 40.8% below our expectations for a margin of 41.6%. The Company reported Adjusted EBITDA of $1.8M (15.7% margin) compared to our forecast for EBITDA of $1.5M (14.3% margin). Cash flow from operations was positive $2.4M while free cash flow was positive $1.7M. The Company finished the period with $9.3M in cash and $10.1M in total debt, of which only $0.8M id due in the next 12 months.”
In a research update to clients August 17, Gilmer maintained his “Buy” rating and one-year price target if $1.75 on ROMJ, implying a return of 250 per cent at the time of publication.
Gilmer believes Rubicon will post EBITDA of $6.1-million on revenue of $43.1-million in fiscal 2023. He expects those numbers will improve to EBITDA of $11.2-million on a topline of $54.4-million in 2024.
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