Organigram. Buy, Sell or Hold?

Moncton, N.B.-headquartered Organigram (Organigram Stock Quote, Chart, News, Analysts, Financials TSX:OGI) reported first-quarter fiscal 2026 results that came in below expectations, but Haywood Securities analyst Neal Gilmer says the company’s strengthened balance sheet and strategic backing support a constructive outlook.

In a Feb. 10 note, Gilmer said he recommends buying the shares at current levels, maintaining his “Buy” rating and $3.25 target price.

“OGI further solidified its balance sheet at a notable premium to market with the investment from BAT that is now complete and better positions it to execute on its growth strategy,” Gilmer said. “In an industry with limited access to capital, we view an increased investment from a strategic partner positively.”

Organigram posted Q1/F26 net revenue of $63.5-million, below Gilmer’s $75.6-million estimate and the $73.2-million consensus forecast. Revenue rose 48.7% year-over-year, largely reflecting the Motif acquisition, but declined 20.6% sequentially on lower international sales, the impact of the B.C. strike and increased competition in vapes and pre-rolls.

Adjusted gross margin was 37.5%, down modestly from 38.2% in the prior quarter. Adjusted EBITDA of $5.3-million trailed Gilmer’s $6.8-million estimate and declined from $9.8-million in Q4. The company used $16.0-million in operating cash flow, primarily due to working capital investments, and ended the quarter with $63.0-million in cash, short-term investments and restricted funds.

Gross adult-use sales increased 40.2% year-over-year but fell 19.9% sequentially. International revenue rose 51.4% year-over-year but declined 47.0% from the prior quarter due to higher volumes of flower that did not meet international specifications. Organigram maintained its top licensed producer position in Canada with an 11.3% market share in Q1/F26.

Management reiterated fiscal 2026 guidance for revenue to exceed $300-million, supported by demand in Canada and international markets, and for Adjusted EBITDA to improve year-over-year with positive free cash flow generation. The company also noted it is preparing responses to feedback received in January 2026 regarding its pending EU-GMP application.

Following the quarter, Gilmer lowered his near-term revenue and Adjusted EBITDA forecasts modestly but left his longer-term top-line outlook largely intact.

He now expects Organigram to generate $33.7-million in Adjusted EBITDA on revenue of $302.2-million in fiscal 2026, improving to $39.5-million in Adjusted EBITDA on revenue of $330.0-million in fiscal 2027.

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