This analyst just raised his target on GURU Organic Energy

Roth Capital Markets analyst Sean McGowan lifted his target price on GURU Organic Energy (GURU Organic Energy Stock Quote, Chart, News, Analysts, Financials TSX:GURU) to C$7.50 from C$4.00 while maintaining a “Buy” rating in an Oct. 27 report, citing accelerating sales momentum and a return to profitability despite the end of its Pepsi distribution agreement.

“GURU’s share price has soared in recent weeks, which we see as the result of investors recognizing that its revenue growth has not been hurt by the discontinuation of its distribution agreement with Pepsi, and that its profitability has significantly improved,” McGowan said. “Despite the sharp appreciation, we see further upside, and have raised our target price to C$7.50, as we see GURU as an innovative company increasing market share in a growing category.”

Since reporting better-than-expected third-quarter results last month, GURU shares have climbed 124%, outperforming the S&P/TSX Composite’s 4% gain and reaching their highest level in over three years. McGowan said earlier skepticism around GURU’s Pepsi partnership weighed on the stock for years after its IPO, but recent quarters show the company “can maintain solid growth without Pepsi” while executing disciplined cost control to achieve positive net income.

“The results validate management’s pre-IPO assertion—that it could in time return to profitable growth,” he said.

McGowan said the North American energy drink market, which had slowed in 2024, has rebounded sharply in 2025, with mid-teens percentage sales growth year over year.

“Guru has managed to hold its share in most retail channels, while increasing its share at Amazon and expanding in the U.S.,” he said. “The company has gone from struggling to hold share in a slowing market to gaining share in a growing market.”

GURU’s long-standing focus on “better-for-you, zero sugar, organic ingredients” aligns with shifting consumer preferences.

“Consumers have come to where GURU has always been,” McGowan said, pointing to the rapid rise of sugar-free energy drinks, which now account for more than half of the North American category volume.

Despite the recent rally, McGowan said he expects further upside as GURU’s positioning in the “better-for-you” segment continues to be re-rated by investors.

“We believe that as the company reports results over the next 18–24 months, surprises are more likely to be to the upside,” he said.

He did not alter his financial forecasts, continuing to model fiscal 2025 Adjusted EBITDA of –$1.5-million on revenue of $33.9-million, improving to $1.0-million on revenue of $41.7-million in fiscal 2026.

“The balance sheet remains debt-free, the company has been repurchasing shares, and we expect revenue surprises to be to the upside as it continues to benefit from favourable industry trends and disciplined execution,” McGowan said.

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