Rubicon Organics (Rubicon Organics Stock Quote, Chart, News, Analysts, Financials TSXV:ROMJ) is on track for strong growth in 2026, with the upcoming Hope facility expected to drive revenues after initial investment pressures in 2025, according to a May 28 note from Haywood Capital Markets analyst Neal Gilmer.
Following in-line first-quarter results and management’s reaffirmed growth strategy, Gilmer maintained a “Buy” rating and $1.10 target, forecasting Adjusted EBITDA to rise from $3.4-million on $51.3-million in revenue in fiscal 2025 to $9.2-million on $65-million in 2026.
“Rubicon’s first quarter results were generally in line with our expectations with EBITDA slightly below forecast – a result that was somewhat expected as management had communicated plans to make near-term investments to drive growth,” Gilmer said. “The Hope facility acquisition is expected to close in the coming weeks, after which management will look to secure the license and begin implementing some capital improvements. The new facility is expected to contribute revenues commencing in 2026 while increased operating costs will impact EBITDA this year ahead of any revenue contribution.”
Rubicon reported Q1 fiscal 2025 revenue of $12.4-million, up 39.2% year over year but down 12.8% from the previous quarter, roughly in line with the $12.6-million estimate. The company posted an adjusted gross margin of 30.6%, down from 35.8% in Q4 but up from 24.7% a year ago. Adjusted EBITDA was $0.7-million, or a 5.8% margin, slightly below the $1.2-million estimate and down from $1.6-million in Q4, but improved from a $0.4-million loss in Q1 2024. Rubicon used $1.0-million in operating cash flow during the quarter, ending with $7.8-million in cash and $9.6-million in total debt. After the quarter ended, the company raised $4.5-million through a unit offering at $0.44 per share.
“Following the results and commentary from management, we made very minor tweaks to our estimates following what we view as an in-line Q1/25,” Gilmer said. “Our 2026 estimates are also relatively similar.”
Rubicon Organics is an emerging player in the Canadian cannabis sector. The company went public in late 2018 after retrofitting its hybrid greenhouse in Delta, B.C., for organic cannabis production.
“Subsequent to receiving its cultivation and production license, Rubicon has scaled up its production and now has distribution agreements representing coverage of a majority of the Canadian addressable market,” Gilmer said. “The company is pursuing a niche segment of the market that we believe is currently underserved.”
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About The Author /
Rod Weatherbie is a journalist based in Prince Edward Island. Since 2004, he has written extensively about the Canadian property and casualty insurance landscape. He was also a founder and contributing editor for a Toronto-based arts website and a PEI-based food magazine. His fiction and poetry have been featured in The Fiddlehead, The Antigonish Review, and Juniper.
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