Curaleaf Holdings continues to impress, this analyst says

Curaleaf Holdings (Curaleaf Holdings Stock Quote, Chart, News, Analysts, Financials TSX:CURA) remains a top cannabis pick for Roth Capital Partners’ Bill Kirk, who reaffirmed his Buy rating and maintained a 12-month price target of (US) $4.00 in a May 1 earnings preview.

Despite short-term turbulence in the broader cannabis market, Kirk sees Curaleaf’s long-term fundamentals and market positioning as intact, supported by a diverse footprint, margin resilience and a strategy increasingly focused on premium products and operational efficiency.

Kirk said the company is buffeted by continued industry headwinds, particularly price compression in mature U.S. markets. While some states are seeing healthy growth, New York, for example, posted $345-million in first-quarter sales, up from $104-million a year earlier, others are beginning to mirror the pricing challenges that have plagued the West Coast.

“Industry-wide, Curaleaf has seen 14% U.S. y/y compression,” Kirk said. “The headwinds should persist throughout 2025 for every operator, but Curaleaf has two avenues to mitigate pressure: investing in its premium offering, where it has long been under-indexed, and exposure to some better states.”

Kirk said the company’s performance in the fourth quarter offers cause for optimism, even amid persistent pricing pressure.

“Encouragingly, in 4Q, despite many price-pressured markets, Curaleaf delivered 48% adjusted gross margin, up 160 basis points year-over-year,” he wrote.

With cultivation yields per square foot up 19% year-over-year and SKU rationalization underway, Kirk believes Curaleaf is entering a period of margin expansion.

“Curaleaf remains one of the broadest cannabis operators, with an extensive U.S. and international presence that should allow the company to mitigate isolated state pricing compression,” he added.

The analyst, however, revised his short-term outlook slightly downward to reflect a more competitive operating environment. He now expects first-quarter 2025 revenue of $316.8-million, down from a previous forecast of $329.0-million, and EBITDA of $ 65.5 million (20.7% margin), down from $71.4-million (21.7% margin). For full-year 2025, Kirk projects $1,325.0-million in revenue and $ 292.1 million in adjusted EBITDA (22.0% margin), revised from $ 1,337 million and $ 303.9 million, respectively.

Looking ahead to fiscal 2026, Kirk estimates revenue will grow to $1,359.8 million, with adjusted EBITDA improving to $ 309.7 million as margin gains from premium products and streamlined operations continue to take hold.

“Curaleaf’s extensive platform, margin management, and strategic product focus position it well to weather near-term pressure and emerge stronger as the regulatory and market landscape matures,” Kirk said

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