This pot stock keeps delivering, analyst says

Haywood Securities analyst Neal Gilmer maintained a “Buy” rating and $3.75 target price on Verano Holdings (Verano Holdings Stock Quote, Chart, News, Analysts, Financials CBOE:VRNO) in a March 12 note following fourth-quarter results the analyst described as largely in line with expectations.

Gilmer said the cannabis producer reported Q4 2025 revenue of $206.6-million, broadly matching Haywood’s $205.6-million estimate and the $205.9-million consensus forecast. Gross margin improved to 51.2%, up from 47.0% in the previous quarter and slightly above the analyst’s 51.0% estimate.

Adjusted EBITDA for the quarter came in at $55.5-million, representing a 26.9% margin, and was roughly in line with both Haywood’s and consensus estimates of $56.2-million.

“Verano is executing on its objectives and has runway for growth going forward with a focus on cash flow generation in 2025,” Gilmer said. “Verano remains undervalued within its peer group despite its strong operating metrics, expense management, and free cash flow.”

The company generated $13.8-million in operating cash flow during the quarter and ended the period with $82.7-million in cash and $399.7-million in debt, excluding issuance costs. Including lease liabilities, total debt stood at $502.8-million.

Operationally, Verano reported 3.5% sequential growth in retail revenue, while wholesale revenue declined 5.3% as the company tightened credit standards with customers. During the quarter the company opened new dispensaries in Ohio and West Virginia and was also awarded one of nine conditional retail licences in Texas.

Gilmer also highlighted the refinancing of Verano’s credit facility. The company entered into a $195-million term loan maturing March 2029, priced at SOFR plus 5.5%, subject to a 4.0% SOFR floor, or 9.5% annually. Proceeds from the facility, along with $50-million drawn from its revolving credit line, will be used to retire the company’s October 2022 credit facility.

Verano provided 2026 capital expenditure guidance of $30-million to $50-million, which management said will support automation, efficiency initiatives and new store openings.

Gilmer forecasts fiscal 2026 revenue of $835.5-million and Adjusted EBITDA of $236.9-million, improving to $862.1-million in revenue and $250.0-million in Adjusted EBITDA in fiscal 2027.

-30-