Curaleaf Holdings price target slashed by this analyst

Following the company’s fourth quarter results, Beacon Securities analyst Russell Stanley has cut his price target on Curaleaf Holdings (Curaleaf Holdings Stock Quote, Chart, News, Analysts, Financials TSX:CURA).

On March 3, CURA reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted Adjusted EBITDA of $75.8-million on Net Revenue of $331.1-million, a topline that was down 4%, year-over-year.

“Fourth quarter revenue was $331 million, up slightly sequentially,” CEO Boris Jordan said. “Adjusted gross margin was 48% and adjusted EBITDA was $76 million or 23%. We ended the fourth quarter with $107 million in cash on the balance sheet, and for the year, generated operating and free cash flow from continuing operations of $163 million and $70 million, respectively. Over the past two quarters, my primary objective has been to amplify our strengths, address key challenges, and stabilize the business. Having successfully achieved this, we are now forging ahead with our “Return to our ROOTS” initiative—an ambitious strategy centered on driving organic growth, optimizing margins and cash flow, and reducing debt. With this sharp focus, I am confident that Curaleaf will not only maintain but expand its leadership position. We will build on the strong organic growth seen in our International business, Ohio, and New York, while harnessing our innovation pipeline to elevate our product offerings. As we step into 2025, there are tremendous opportunities ahead for Curaleaf.”

Following the news, Stanley cut his price target on the stock from $7.00 to $2.50, while maintaining his “Buy” rating. The analyst explained the reasoning behind the move in a March 4 update to clients.

“We are reducing our PT to C$2.50/sh following a valuation reset with the introduction of our F2026 forecast. Last night after the close, CURA reported Q4 revenue/adj EBITDA that was in line with our forecast/consensus/guidance, along with operating cash flow that was stronger than expected. We note that the International business delivered $107M in F2024 revenue, and its potential should help CURA produce strong EBITDA growth through F2026 relative to the other major MSOs.”

Stanley thinks CURA will post Adjusted EBITDA of $309-million on revenue of $1.37-billion in fiscal 2025. He expects those numbers will improve to Adjusted EBITDA of $402-million on a topline of $1.54-billion in fiscal 2026.