High Tide is building momentum, this analyst says

In a Sept. 15 note, Roth Capital Markets analyst Bill Kirk reiterated a “Buy” rating and $5.00 price target on High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials TSXV:HITI) following third-quarter results that exceeded consensus and landed at the high end of guidance.

“High Tide announced 3Q’25 results above consensus and at the high end of guidance, demonstrating favourable positioning, in what has become a resilient Canadian cannabis market,” Kirk said.

Same-store sales rose 7.4% year-over-year, the highest since Q4’23, while free cash flow of C$7.7-million was up 148% despite seven new store openings in the quarter. Management reaffirmed its long-term goal of 300-plus Canna Cabana locations.

High Tide is Canada’s largest cannabis retailer, operating under its flagship Canna Cabana banner with 207 stores across five provinces. Since adopting a membership-based discount club model in late 2021, it has grown to more than 2.0 million Cabana Club members and 115,000 ELITE subscribers. Same-store sales are up 132% since the transition, with average store revenue of $2.8-million annually, or $1,648 per square foot.

Q3 revenue reached C$149.7-million, up 14% year-over-year and 9% sequentially, marking the strongest growth rate in seven quarters and ahead of consensus at $147-million. Same-store sales growth of 7.4% lifted market share by one percentage point to 12%, with average Canna Cabana locations generating more than double peer revenues. Gross margin of 27% was up 100 basis points sequentially and flat year-over-year, while Adjusted EBITDA of C$10.6-million came in at the top of the $9.6–$10.6-million guidance range, up 32% quarter-over-quarter. EPS of $0.01 matched expectations, turning positive on stronger sales and margins.

Kirk pointed to High Tide’s Remexian Pharma acquisition as a key international growth driver. The German distributor sold seven tonnes of cannabis flower in Q2’25, representing 16% of total national sales volume.

“Following the closing of its Remexian acquisition, we believe Remexian underscores how important High Tide is for LPs’ access to: one, Canada today; two, Germany tomorrow; and three, international markets later,” he said.

“With Canadian momentum building and an established international presence, we see a clear path to continued top line and EBITDA growth, as (High Tide) has effectively become both the preferred Canadian retail and German supply partner for leading LPs,” Kirk added.

He noted the company has underperformed Canadian and U.S. peers recently, reflecting its lack of direct U.S. exposure, but argued that shares do not reflect its domestic or international upside.

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

-30-