This Canadian energy drink stock is a buy, analyst says

Roth Capital Partners analyst Sean McGowan says Guru Organic Energy’s (GURU Organic Energy Stock Quote, Chart, News, Analysts, Financials TSXV:GURU) Q3 results showed continued improvement, with sales growth outpacing the broader energy drink category.

In a research update to clients September 11, McGowan maintained his “Buy” rating and $8.00 price target on GURU.

The analyst said Guru’s results modestly beat his estimates.

“Adjusted for one-time items related to last year’s distribution changeover, revenue retail sales growth significantly outpaced overall category growth in both Canada and the U.S.,” he said in his Sept. 11.

Guru reported Q3 revenue of $11.5-million, up 10% year-over-year. Adjusting for prior-year estimate changes tied to its Pepsi distribution transition, revenue rose 29%.

Canadian revenue was flat on a reported basis at $8.7-million, but rose 19% on an adjusted basis. U.S. revenue increased 60%, helped by growth with major customers including Amazon and Whole Foods.

Guru also added Sprouts Farmers Market as a U.S. customer.

McGowan said scan data showed Guru’s retail sales rose 15% year-over-year in both Canada and the United States, ahead of recent energy drink category growth in both markets.

Gross margin was 61.9%, below McGowan’s 62.8% estimate, reflecting higher trade spending. He lowered his fiscal 2026 gross margin estimate to 62.6% from 63.0%.

Operating expenses were $6.7-million, below his $7.0-million estimate. Adjusted EBITDA was $900,000, ahead of his $600,000 forecast.

McGowan said Guru should report positive net income and Adjusted EBITDA for fiscal 2026, though some quarters may be unprofitable as the company invests in growth.

Guru also announced a leadership change. CEO Carl Goyette has stepped down, though he will remain on the board while the company searches for a replacement.

McGowan said the move likely reflects Guru’s push to build its U.S. business with leadership experienced in scaling consumer brands.

“Although this creates some near-term uncertainty, we believe the fact that the transition is coming amidst record results and accelerating growth shows that it is a move being undertaken from a position of strength,” McGowan said.

He expects Guru to generate Adjusted EBITDA of $700,000 on revenue of $39.8-million in fiscal 2026, improving to Adjusted EBITDA of $3.0-million on revenue of $46.2-million in fiscal 2027.

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