Is Organigram stock a buy?

Organigram (Organigram Global Stock Quote, Chart, News, Analysts, Financials TSX:OGI) reported fiscal Q3 2025 results for the period ended June 30 that were in line with expectations, helped by contributions from the Motif acquisition and strong international sales, Haywood Capital Markets analyst Neal Gilmer said Aug. 13.

The analyst maintained a “Buy” rating and $2.50 target. Adjusted gross margin rose to 34.2% from the prior quarter, moving closer to management’s ~35% fiscal 2025 goal.

“The company is on track to realize synergies of $15M within 24 months, that is expected to drive margin improvements into fiscal 2026,” Gilmer said.

Organigram is a licensed cannabis producer based in Moncton, New Brunswick. It partnered with British American Tobacco in 2023 to develop new cannabis products and also bought The Edibles and Infusions Corporation the same year, adding an edibles facility in Manitoba.

Organigram’s fiscal Q3 2025 net revenue was $70.8-million, topping Haywood’s $69.0-million estimate and the $68.0-million consensus, up 72.4% year over year on the Motif acquisition, Gilmer said. Adjusted gross margin improved to 34.2%, and Adjusted EBITDA was $5.7-million, ahead of last quarter’s $4.9-million but shy of consensus at $6.3-million. The company produced $14.6-million in operating cash flow and $5.0-million in free cash flow, with quarter-end liquidity of $85.9-million.

Adult-use sales rose 64.3% year over year and 5.8% from Q2, international sales jumped 208% and 22%, and wholesale, medical, and other sales increased 55.5% and 20.3%, respectively.

“During the quarter, OGI retained the top Licensed Producer position in Canada with an 11.6% market share. Management noted that market share rose to 12% during July 2025,” Gilmer said.

Management expects domestic and international sales to keep growing in the coming quarters, with larger international flower shipments planned for Q4 and later.

“The company reiterated they expect gross margins of approximately 35% for FY2025 and expect margins to expand to 40% in the back half of FY2026 driven by capacity enhancements, cost reductions and product shift mix towards higher-margin international sales,” Gilmer said.

Organigram has realized $4.2-million in efficiency gains to date, equal to $11-million on an annualized basis, and remains on track to reach its $15-million target. Management is awaiting final EU-GMP certification, which is expected to boost international revenue and improve margins.

“We have updated our model following the quarter, with our revenues increasing slightly, in part due to Q3’s slightly higher revenue, with EBITDA increasing slightly for the year,” Gilmer said. “For 2026, we are notably increasing our EBTIDA estimate by 8% with higher gross margins and synergy savings. We are maintaining our target price of $2.50 based on a 1.6x EV/Revenue multiple to our F2026 estimate, discounted by 10%.”

Gilmer said that Organigram should do $19.2-million in adjusted EBITDA on revenue of $251.6-million in fiscal 2025. He thinks those numbers will improve to $32.5-million on revenue of $283.9-million in fiscal 2026.

Gilmer recommended buying Organigram shares at current levels.

“OGI further solidified its balance sheet at a notable premium to market with the investment from BAT that is now complete and better positions it to execute on its growth strategy,” he said. “In an industry with limited access to capital, we view an increased investment from a strategic partner positively, ahead of new product launches that should drive market share and revenue growth next year, while also insulating it from the challenging market with a strong cash position.”

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