Buy Decibel Cannabis for a double, this analyst says

Haywood analyst Neal Gilmer reiterated his “Buy” rating and $0.25 target on Decibel Cannabis Company (Decibel Cannabis Company Stock Quote, Chart, News, Analysts, Financials TSXV:DB) after fourth-quarter 2025 results, saying international growth tied to AgMedica continues to strengthen the story even as domestic sales were affected by the B.C. strike.

In an April 17 note, Gilmer said fourth-quarter revenue rose 13.5% year over year to $28.7-million, below his $31.2-million estimate, while Adjusted EBITDA increased 19.3% to $6.2-million, or a 21.6% margin, compared with his $6.8-million forecast and 21.7% margin estimate. Gross margin came in at 50.4%, above his 48.0% forecast.

Gilmer said international sales remained the main growth driver, rising 116% from a year earlier on the contribution from AgMedica, despite disruption in German imports. Management said AgMedica contributed $7.0-million in EBITDA for the year, well above the $4.0-million expected at the time of acquisition, implying a transaction multiple of less than 1x. Domestic recreational sales slipped 2% year over year because of the B.C. strike.

Decibel generated $3.7-million in operating cash flow and $3.0-million in free cash flow in the quarter, ending the period with $7.5-million in cash and $35.3-million in debt. After quarter-end, the company refinanced with a $61-million credit facility extending maturity to 2030.

For 2026, Decibel guided to net revenue of $130-million to $135-million and Adjusted EBITDA of $27-million to $31-million, implying midpoint growth of 18% and 26%, respectively. Gilmer said he lowered his 2026 revenue estimate slightly to align with guidance, with little change to EBITDA, and introduced 2027 estimates.

“In our opinion, Decibel has demonstrated the quality of its brands by capturing market share relative to the peer group,” Gilmer said. He added that the company’s international push should continue to drive growth and that greater investor awareness could help close the valuation gap.

Gilmer now expects Decibel to generate Adjusted EBITDA of $28.7-million on revenue of $131.9-million in fiscal 2026, improving to Adjusted EBITDA of $33.3-million on revenue of $148.5-million in fiscal 2027.

The analyst said his $0.25 target is based on 1.3x projected 2027 revenue, discounted by 15%.

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