High Tide is a cannabis stock you should own, Roth says

High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials NASDAQ:HITI) has guided third-quarter fiscal 2025 results ahead of expectations, showing momentum in what Roth Capital Markets analyst Bill Kirk calls a resilient Canadian cannabis market. In an August 18 note, he reiterated a “Buy” rating with a 12-month price target of (US) $5.00.

“Between the positive guidance, the acquisition of Remexian and the recent investment by Cronos, HITI continues to execute on becoming a key player both in Canada and internationally, as markets develop,” Kirk said. “In a sector where branding/marketing is difficult, a retailer with an audience accrues much of the value in the vertical.”

High Tide expects revenue between C$147-million and C$150-million, compared with consensus at C$146-million. Gross profit is forecast at C$38.5-million to C$40.0-million, or 26.2%–26.6% margin, above consensus of C$38.0-million, or 26.0%. Adjusted EBITDA is guided to C$9.6-million to C$10.6-million (6.5%–7.0% margin), compared with consensus at C$8.4-million (5.4%).

The beat reflects same-store sales growth of 7.4%, the strongest in more than two years, implying year-over-year revenue growth of 12% to 14%. Gross margin is expected to decline slightly, with Adjusted EBITDA margin narrowing less than 100 basis points year over year despite store expansion.

On the Remexian acquisition, Kirk said: “Remexian sold seven tonnes of cannabis flower in 2Q’25, representing 16% of Germany’s total tonnage on the quarter. We believe HITI can get that share to mid-20% by leveraging its (licensed producer) relationships. Remexian can source from 19 countries, but we believe is currently under-utilizing Canadian-grown supply.”

The deal should be immediately accretive, with annual revenue of about C$100-million and Adjusted EBITDA of roughly C$24-million, Kirk said.

He added that High Tide is becoming “deeply ingrained” in licensed producer ecosystems.

“With Canadian momentum building and an established international presence, we see a clear path to continued topline and EBITDA growth, as HITI has effectively become both the preferred Canadian retail and German supply partner for leading LPs. With the recent run-up in both Canadian and U.S. cannabis stocks, we note HITI has relatively underperformed peers, due to lack of limited direct U.S. exposure. Shares do not reflect the company’s upside domestically or outside Canada, in our opinion.”

Looking ahead, Kirk forecasts Adjusted EBITDA of $33.3-million on revenue of $577.7-million in fiscal 2025, improving to $40.7-million on $620.5-million in fiscal 2026.

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