Is High Tide stock still a buy?

Roth Capital Markets analyst Bill Kirk said High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials TSXV:HITI) delivered another quarter of beats, with record revenue and Adjusted EBITDA underscoring what he described as continued execution momentum, despite some near-term noise.

In a Jan. 29 note, Kirk said Canadian-based High Tide reported a top-line and Adjusted EBITDA beat in the quarter, alongside its second consecutive quarter of positive adjusted earnings. Fourth-quarter adjusted EPS came in at $0.02, while record results were achieved even as same-store sales growth moderated modestly and margins held steady despite an aggressive store expansion program.

Kirk reiterated his “Buy” rating and $5.00 target.

High Tide reported fourth-quarter revenue of $164.0-million, ahead of consensus at $159.1-million, up 10% quarter-over-quarter and 19% year-over-year. Same-store sales rose 5.5% year-over-year, down from 7.4% in the prior quarter but still above the 5% level, with market share increasing by one percentage point to 12%. Gross margin was 26%, down 100 basis points sequentially and roughly flat year-over-year, reflecting the rapid liquidation of Portugal inventory at lower prices.

Adjusted EBITDA totaled $12.4-million, ahead of consensus at $11.0-million, up 17% quarter-over-quarter and 51% year-over-year. Reported net loss of approximately $46.7-million was driven by a $23.6-million impairment charge and a further $23.5-million non-cash derivative valuation charge. Free cash flow was $1.3-million in the quarter, down from $2.3-million in the prior period due to higher working capital, while trailing twelve-month free cash flow remained solid at $12.0-million, despite the opening of 27 new locations over the year.

Retail productivity remained best-in-class, with sales of $1,775 per square foot in the quarter. Ending cash was $47.9-million, down sequentially following the $12.3-million payment related to the Remexian acquisition.

Kirk said December shipments from Remexian were the second-highest on record following earlier operational disruptions, and he expects incremental growth from the asset as international operations normalize. He added that the acquisition effectively added roughly $100-million in annualized revenue and $24-million in annualized EBITDA for a purchase price of about $43.7-million.

Looking ahead, management expects to open 20–30 additional locations in fiscal 2026, primarily through organic growth, and anticipates remaining free-cash-flow positive despite working capital demands tied to Remexian. While white-label products currently account for about 1% of sales, High Tide reiterated a long-term target of approximately 20%. Fourth-quarter adjusted EBITDA margin was 9.4%, with management outlining a path toward 12% over time.

Kirk said High Tide’s strong Canadian retail base, combined with expanding international opportunities, positions fiscal 2026 to be stronger than fiscal 2025.

He forecasts Adjusted EBITDA of $37.2-million on revenue of $588.6-million in fiscal 2025, improving to $56.5-million on revenue of $698.4-million in fiscal 2026.

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