Rubicon Organics wins price target raise at Haywood

Haywood Capital Markets analyst Neal Gilmer raised his target price on Rubicon Organics (Rubicon Organics Stock Quote, Chart, News, Analysts, Financials TSXV:ROMJ) to $1.30 from $1.10 in an Aug. 18 report, citing stronger-than-expected second quarter results.

“The company expects to receive licensing approval from Health Canada for the Hope facility by year-end, after which management will begin implementing some capital improvements,” Gilmer wrote. “The new facility will add 4,500 kg of annual production capacity, setting 2026 up to be a very strong year.”

Rubicon, which went public in 2018 after retrofitting its Delta, B.C., greenhouse for organic cannabis production, reported Q2/25 revenue of $15.0-million, up 24% from last year and 21% from the previous quarter, ahead of Haywood’s $12.6-million estimate. Adjusted gross margin improved to 34.2%, compared with 30.6% in Q1 and 30.2% a year earlier. Adjusted EBITDA was $1.4-million (9.2% margin), above Haywood’s $1.0-million forecast and up from $0.7-million in Q1 and $0.9-million in Q2/24.

The company generated $0.8-million in operating cash flow, ending the quarter with $7.3-million in cash and $9.5-million in debt, and completed a $4.5-million private placement during the period.

In Q2, Rubicon held 1.9% of the national flower and pre-roll market, down slightly from 2.0% in Q1. Its premium share in those categories was 5.2%. The Wildflower brand ranked second nationally in topicals with a 28.3% share, up from 26.6% in Q1, while Rubicon’s premium edibles held a 26.2% share.

The Hope facility, once licensed, is expected to add 4,500 kg of annual production capacity—about a 40% increase—and contribute to revenue in 2026. Management has guided for $1–2-million of start-up costs in 2025, with part of the $4.5-million private placement allocated to funding initial operations.

Following Q2 results, Haywood raised its 2025 revenue and EBITDA forecasts slightly, with larger increases to 2026 estimates to reflect contributions from the new facility. The firm is maintaining its “Buy” rating while lifting its price target to $1.30, based on 1.5 times estimated 2026 revenue.

Gilmer projects Rubicon will generate $5.2-million in Adjusted EBITDA on revenue of $58.6-million in fiscal 2025, improving to $10.5-million on $69.7-million in fiscal 2026.

“Rubicon continues to have strong market share within the premium segment across its markets. The Company remains prudent in operating expenses with a solid balance sheet. The acquisition of the new facility will help drive continued growth next year. We believe the Company is positioned to establish itself in a strong niche segment of the market.”

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