High Tide stock is a buy, Ventum says

Following a recent development, Ventum Capital Markets analyst Andrew Semple remains bullish on High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials TSXV:HITI).

On December 2, High Tide announced it would expand its cannabis retail chain Cabana Club across the U.S. and Europe.

“Innovation and market disruption are at the core of High Tide’s DNA and today marks another milestone in our journey,” CEO Raj Grover said. “I am excited to announce that, in celebration of Cyber Monday, we are taking our highly successful Cabana Club membership program global. The CBD and consumption accessory markets are still fragmented across the U.S. and Europe, which presents a significant opportunity for High Tide to lead consolidation efforts as we expand our international e-commerce footprint. With our proven track record, I am confident that we will disrupt the global on-line space in the same transformative way we’ve reshaped the Canadian cannabis landscape.”

Semple commented on the news.

“We are pleased to see High Tide expand its discount club model globally, and remain on the leading edge of innovation in the retail industry,” he wrote. “We believe the expansion of its Cabana Club ecosystem allows High Tide to obtain global brand recognition, reinvigorate the growth profile in its e-commerce segment (which has been declining since the COVID pandemic), and provide an easier transition for High Tide to launch adult-use cannabis operations within these markets once regulators permit.”

In a research update to clients December 2, Semple maintained his “Buy” rating and price target of $8.50 on HITI, implying a return of 71.7% at the time of publication.

The analyst thinks the company will post Adjusted EBITDA of $37.8-million on revenue of $519.5-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $35.4-million on a topline of $585.3-million in fiscal 2025.