TSND stock has target raised at Clarus

After increased guidance from the company, Clarus Securities analyst Noel Atkinson has raised his price target on TerrAscend (TerrAscend Stock Quote, Chart, News, Analysts, Financials TSX:TSND).

On October 13, TSND said it expects EBITDA of at least $63-million on revenue of $317-million> The company’s previous guidance came in at $58-million in EBITDA on a topline of at least $305-million.

“We have good visibility and confidence in the remainder of the year, as evidenced by the increase in our full-year guidance,” said executive chairman Jason Wild. “We expect to drive industry-leading revenue growth, continued improvement across all P&L [profit/loss] metrics, and positive free cash flow in the second half of the year.”

In a research update to clients October 16, Atkinson maintained his “Buy” rating on TSND, but raised his one-year price target on the stock from $3.00 to $3.25.

“We continue to be at the conservative end of management’s 2023 guidance, and we see significant room for outperformance versus our 2024 estimates,” the analyst explained. To that end, for 2024e we assume investments in 3 NJ social equity stores, only one new store in Michigan, and relatively
modest Y/o/Y growth in MD. TSND continues to have a superior revenue and Adj. EBITDA growth profile versus the U.S. MSO peer group. Our target valuation remains 14x 2024e EV/Adj. EBITDA, which we think is reasonable given TSND’s expected organic growth rates of revenue and Adj. EBITDA in 2023e and 2024e.

Atkinson’s updated estimates have TSND generating EBITDA of $63.8-million on revenue of $318.2-million in 2023. In 2024, he sees Adjusted EBITDA of $86.9-million on a topline of $376.4-million.