Village Farms: this analyst just raised his target to (US) $8.00

Beacon Securities analyst Doug Cooper says Village Farms International’s (Village Farms International Stock Quote, Chart, News, Analysts, Financials NASDAQ:VFF) Q2 results showed the earnings power of shifting more cannabis production toward higher-margin international markets.

In an Aug. 11 update, Cooper maintained his “Buy” rating on Village Farms and raised his target to $US $8.00 from $5.50. His target is based on 10 times his mid-2027 run-rate EBITDA estimate of about $100-million.

Village Farms reported Q2 revenue of $64-million, EBITDA of $15.4-million and EPS of six cents, up from $50-million, $9.9-million and two cents in Q1.

International cannabis revenue from Germany rose 74% year-over-year and 43% sequentially to $20.9-million. Netherlands revenue increased 35% year-over-year to $3.35-million, while Canadian branded sales fell 8% to $23-million.

Cooper said Village Farms allocated production to higher-growth, higher-margin European markets, helping gross margin rise to a record 53.5%. EBITDA margin was 24.1%, while cannabis segment EBITDA margin was 29%.

The analyst said inventory was essentially flat quarter-over-quarter, suggesting the company sold every gram it produced.

New capacity from the Delta 2 conversion and the Netherlands is expected to begin contributing in Q4 fiscal 2026 and fully ramp by mid-2027.

Cooper said Village Farms could eventually generate more than $390-million of revenue and about $100-million of EBITDA once planned capacity is online.

He also said Curaleaf’s hostile bid for Aurora Cannabis highlights the strategic value of international cannabis assets.

“Cura’s move has shown how valuable that international market is and what it is willing to pay for it, which is up to 15x ACB’s EBITDA,” Cooper said.

Cooper said Village Farms has the world’s largest EU-GMP certified facility and remains undervalued relative to its growth potential.

He expects Village Farms to generate Adjusted EBITDA of $54.3-million on revenue of $241.2-million in fiscal 2026, improving to Adjusted EBITDA of $67.8-million on revenue of $289.1-million in fiscal 2027.

Disclosure: The family of Nick Waddell owns shares of Village Farms

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