Green Thumb Industries Stock (GTII:TSX) Bullish on Valuation

STA Research
by: STA Research
Green Thumb Industries

Analysis of the Green Thumb Industries stock.

Based on 2 analysts’ stock projections, the average analyst target price for Green Thumb Industries stock over the next 12 months is CAD 17.50. The consensus analyst recommendation for Green Thumb Industries stock is Strong Buy. Based on 8 positive indications and 6 negative signals, Stock Target Advisor’s own stock analysis of Green Thumb Industries stock is Slightly Bullish. The stock price of Green Thumb Industries stock was CAD 19.00 at the most recent close. The stock price of Green Thumb Industries stock changed by +10.14% over the previous week, +39.71% over the previous month, and -33.45% over the previous year. The consensus Crowd Rating for the stock is a Strong Buy, with a 12 month Crowd Target forecast of $27 per share.

News:

Recently, Beacon Securities analyst Russell Stanley published a report to the firm’s clients  with respect to Green Thumb Industries stock. The analyst sees the sector as a real area of opportunity, while sentiment is very poor on cannabis stocks in general.  Analyst Russell Stanley maintained his Buy rating on the company, alongside a 12 month target of $40 per share.

Third Quarter Report And Nine Months Ended September 30, 2022:

  • Revenue rose 3% to $261 million.
  • Year-to-date 2022 revenue rose 17% to $758 million
  • 9th consecutive quarter of positive GAAP net income, delivering $10 million or $0.04 per basic and diluted share.
  • Adjusted Operating EBITDA up 7% to $84 million

 

About Green Thumb Industries Stock (GTII:CA:CNSX)

Green Thumb Industries Inc. produces, sells, and distributes numerous cannabis products for both medical and adult use in the US. Under the Beboe, Dogwalkers, Doctor Solomon’s, Good Green, Incredibles, and RHYTHM brands, it sells cannabis flower as well as processed and packaged goods like pre-rolls, concentrates, vapes, edibles, topicals, and tinctures. In addition to selling finished goods to customers directly in its own retail outlets, the company largely distributes its products to other retailers. It owned and ran 77 retail locations in the US as of April 11, 2022. The business was established in 2014, and its main office is in Chicago, Illinois.

 

Fundamental Analysis:

 

Positive Fundamentals:

High market capitalization 
This organisation is among the top quartile and is one of the biggest in its industry. These businesses are typically more reliable.

Superior returns on risk
In the top quartile, this stock has outperformed its sector rivals on a risk-adjusted basis over the course of at least a 12-month holding period.

Excellent return on equity
The management of the company has outperformed its competitors in terms of return on equity over the last four quarters, ranking it in the top quartile.

Superior capital efficiency
In the last four quarters, firm management outperformed its counterparts in terms of return on invested capital, putting it in the top quartile.

Excellent return on assets
The management of the company has outperformed its counterparts in terms of return on assets over the last four quarters, putting it in the top quartile.

Positive cash flow
The last four quarters saw positive total cash flow for the organisation.

Positive free cash flow
The last four quarters saw the company generate positive total free cash flow.

Superior growth in earnings
In the preceding five years, this stock’s profits growth was in the top quartile for its industry.

 

Negative Fundamentals:

Excessive volatility
Over the past five years, this company’s total returns have been erratic and higher above the industry average. If you plan to invest in such a stock, be sure your risk tolerance is adequate.

Excessive in comparison to wages
The stock is trading above the sector median and at a premium to its peers in terms of price to earnings.

Compared to book value, it is overpriced
On a price to book value basis, the stock is selling at a premium to the median of its peer group.

Overpriced based on cash flow
On a price to cash flow ratio, the stock is trading at a premium to that of its competitors. Its pricing is higher than the sector median. Whenever you are thinking about buying, go with prudence.

Extremely leveraged
In terms of debt to equity, the company is heavily leveraged and in the bottom half of its sector rivals. Check the news, though, and study the sector and management remarks. This can be high at times since the business is attempting to grow quickly.

Overpriced based on free cash flow
On a price to free cash flow basis, the stock is trading at a premium to that of its competitors. Its pricing is higher than the sector median. Whenever you are thinking about buying, go with prudence.

Conclusion of Analysis:

The stock on a fundamental analysis basis  for Green Thumb Industries scores 5.7 out of 10, whereby the stock is seen overall as slightly Bullish.

Disclaimer

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