This analyst still loves Organigram

Haywood Capital Markets analyst Neal Gilmer raised his target price on Organigram (Organigram Global Stock Quote, Chart, News, Analysts, Financials TSX:OGI) to $3.25 from $2.50 while reiterating a “Buy” rating following stronger-than-expected fourth-quarter results and an improving margin profile.

Organigram reported Q4 fiscal 2025 results for the period ended September 30, 2025, with net revenue and Adjusted EBITDA exceeding both Haywood and Street expectations. Net revenue came in at $80.1-million, ahead of Gilmer’s $72.5-million estimate and consensus of $73.0-million, representing 79% year-over-year growth, largely driven by the Motif acquisition. Adjusted gross margin expanded sequentially to 38.2%, up 400 basis points from Q3 and above forecast, while Adjusted EBITDA rose to $9.8-million, compared with $5.7-million in the prior quarter and Haywood’s $7.2-million estimate.

“The increase in revenues was supported by increased adult-use sales and continued growth of international sales,” Gilmer said. “As a result of the higher-than-forecast revenues and solid margins, Adjusted EBITDA was also higher than expected.”

Gross adult-use sales increased 70.8% year-over-year and 10.4% quarter-over-quarter, reflecting a full quarter of contribution from Motif. International sales rose 131.9% year-over-year and 28.3% sequentially, while wholesale, medical and other sales increased modestly. Organigram maintained its position as the top licensed producer in Canada in fiscal 2025, with an 11.9% market share. Cash, short-term investments and restricted funds totaled $84.4-million at quarter-end, despite $1.5-million of operating cash outflow tied primarily to working capital investments.

Management guided to continued expansion in both domestic and international markets, noting that first-quarter fiscal 2026 growth may be moderately tempered by the eight-week B.C. General Employees’ Union strike, partially offset by international momentum.

For fiscal 2026, Organigram expects revenue to exceed $300-million, supported by demand growth, margin expansion from Motif synergies, optimized cultivation performance, and a rising mix of higher-margin international sales. The company achieved $7.1-million in synergies in fiscal 2025, or $15-million annualized, in line with prior targets, and has submitted additional documentation to Health Canada related to its pending EU-GMP application, which Gilmer believes could further support international growth and margins once approved.

Following the quarter and updated guidance, Gilmer raised his revenue and margin assumptions for fiscal 2026 and introduced fiscal 2027 estimates, forecasting $316.4-million in revenue and $37.6-million in Adjusted EBITDA in 2026, improving to $328.5-million in revenue and $41.9-million in Adjusted EBITDA in 2027.

Gilmer has increased his target price to $3.25 based on a 1.75× EV/revenue multiple applied to fiscal 2027 estimates and discounted by 10%, citing stronger execution, improved outlook and renewed sector momentum.

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

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