Organigram has price target chopped at Haywood

Following the company’s first quarter results, Haywood analyst Neal Gilmer has cut his price target on Organigram (Organigram Stock Quote, Chart, News, Analysts, Financials TSX:OGI).

On February 11, OGI reported its Q1, 2025 results. The company posted Adjusted EBITDA of $1.4-million on Net Revenue of $42.7-million, a topline that was up 17%, year-over-year.

“This is an exciting time for Organigram as we kick off Fiscal 2025 as Canada’s largest recreational cannabis company by market share,” CEO Beena Goldenberg said. “Our strategic priorities for the fiscal year focus on integrating Motif to maximize operational synergies, continuing to expand our presence in international markets, and driving even more innovation—both in our product portfolio to delight our consumers, and also within our operations to enhance value for our shareholders.”

The analyst broke down the quarter.

“Organigram reported Q1/F25 net revenue of $42.7M, compared to consensus at $48.9M and our forecast for $53.4M, representing an increase of 17% Y/Y,” he wrote. “Adjusted gross margin declined in the quarter to 33.4% compared to 37.0% last quarter. Adj. EBITDA of $1.4M decreased from $5.9M in the prior quarter but improved from $0.1M in Q1/24 and compares to our estimate at $2.9M and consensus at $4.2M. Organigram used approximately $4.2M in cash flow from operations in the quarter and finished the period with cash, short-term investments & restricted funds of $71.2M that reflects the acquisition of Motif Labs and associated transaction costs. The last tranche from BAT is expected to close before the end of February that will contribute $41.5M on the balance sheet.”

In a research update to clients February 12, Gilmer maintained his “Buy” rating but cut his price target on the stock from $3.00 to $2.50, still implying a return of 74% at the time of publication.

The analyst thinks the company will post EBITDA of $18.1-million on revenue of $237.7-million in fiscal 2025. He expects those numbers will improve to EBITDA of $26.0-million on revenue of $267.6-million in fiscal 2026.

We have updated our model following the quarter with our revenues declining based on what was realized in Q1 with EBITDA increasing slightly with the attainment of cost synergies achieved later in F2025 and into F2026. As a result of lower revenues and increased shares outstanding, we are lowering our target price $2.50 from $3.00 based on a 1.5x EV/Revenue multiple to our F2026 estimate discounted by 10% (previously 15%),” Gilmer explained.