OGI stock has modest upside, says Haywood

Following the company’s Q1,2024 results, Haywood Capital Markets analyst Neal Gilmer has maintained his “Buy” rating on Organigram Holdings (Organigram Holdings Stock Quote, Chart, News, Analysts, Financials TSX:OGI).

On February 13, OGI reported its Q1, 2024 results. The company produced Adjusted EBITDA of $100,000 on Net Revenue of $36.5-million, a topline that was down 16 per cent from the same period a year prior.

The analyst gave his take on Organigram following the release of the report.

“The Company has continued to improve its market share position in the Canadian adult-use market and remains one of the leaders in several categories,” he wrote. “Its portfolio of products is expected to continue expanding with innovative SKUs on the horizon through its investments in Phylos and GreenTank. We have updated our model following the quarter with our revenues relatively unchanged while EBITDA declines with slightly higher operating expenses. We have introduced our fiscal 2025 estimates with revenue growth of 16%.

In a research update to clients February 13, Gilmer maintained his “Buy” rating and one-year price target of $3.00 on OGI, implying a return of 15 per cent at the time of publication.

The analyst thinks OGI will post EBITDA of $7.8-million on revenue of $164.3-million in fiscal 2024. He expects those numbers will improve to EBITDA of $12.0-million on a topline of $189.9-million in fiscal 2025.

“Recently OGI further solidified its balance sheet at a notable premium to market and better positions it to execute on its growth strategy,” Gilmer concluded. “In an industry with limited access to capital we view an increased investment from a strategic partner positively, ahead of new product launches that should drive market share and revenue growth next year, while also insulating it from the challenging market with a strong cash position.”