Is Verano Holdings stock a buy?

In an August 7 report, Haywood Capital Markets analyst Neal Gilmer maintained a “Buy” rating and C$3.50 target price on Verano Holdings (Verano Holdings Stock Quote, Chart, News, Analysts, Financials CSE:VRNO), citing solid second-quarter performance. Revenue matched expectations, but higher gross margins pushed EBITDA well above estimates.

Gilmer noted management sees EBITDA margins of about 30% as sustainable based on historical trends, and he advised investors to add to positions at current prices.

“We reiterate our ‘Buy’ recommendation,” he said. “Verano is executing on its objectives and has runway for growth going forward with a focus on cash flow generation in 2025. Verano remains undervalued within its peer group despite its strong operating metrics, expense management, and free cash flow.”

Verano is a Chicago-based cannabis company that operates 157 retail stores in 13 states and grows and produces its own products in 12 of them. Verano runs 15 production facilities across the U.S., covering more than 1.1 million square feet. The company sells a wide range of premium cannabis products through its ten consumer brands.

Verano reported Q2/25 revenue of $202.3-million, matching Haywood’s estimate of $205.1-million and slightly below the $210.9-million consensus. Adjusted gross margin rose to 64.3%, beating the 58.0% forecast and improving from 55.9% in Q1. Adjusted EBITDA came in at $66.2-million, a 32.7% margin, above the $52.0-million estimate and $57.7-million consensus. The company generated $10.9-million in operating cash flow, ending the quarter with $68.6-million in cash and $403.3-million in debt (net of issuance costs), or $509-million including lease liabilities.

“Net retail revenue was essentially flat sequentially while wholesale continued to be impacted by management’s approach on credit worthy customers, declining 19.1% during the quarter,” Gilmer said. “The company expects wholesale sales to gradually rebound in H2/2025 based on negotiations it is conducting with certain customers to resume shipments. Verano has continued to expand its retail presence with the opening of a new dispensary in Florida as well as Connecticut and now operates 157 dispensaries nationwide.”

Gilmer said Verano should do $241.3-million in Adjusted EBITDA on revenue of $824.7-million in fiscal 2025. He thinks those numbers will improve to $255.2-million on revenue of $871.5-million in fiscal 2026.

“Following a review of the results, we have made some changes to our model,” he said. “While we have tempered our revenue growth for H2/25, we have offset with improved margins that results in a slight increase in EBITDA for the year. Our 2026 estimates are relatively unchanged. We maintain our Buy recommendation and target price of $3.50 based on 6x our revised 2026 EBITDA estimate, discounted by 15%.”

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