This Canadian weed inventory is severely undervalued, analyst says

Neal Gilmer of Haywood Capital Markets reiterated a “Purchase” score and $8.00 worth goal on Excessive Tide (Excessive Tide Inventory Quote, Chart, Information, Analysts, Financials TSXV:HITI) following first-quarter 2026 outcomes, whereas modestly adjusting his ahead estimates.

In a report following discussions with administration, Gilmer mentioned he has barely lowered his 2026 forecasts to raised replicate seasonal traits and margin dynamics that carry into 2027, however stays optimistic on the corporate’s outlook.

“In our opinion, Excessive Tide has demonstrated the sturdy retail prowess to proceed to be the chief in Canada,” he mentioned. “We suggest buyers have publicity based mostly on its income development profile and optimistic EBITDA and money circulation.”

Excessive Tide reported Q1 income of $178.3-million, up 25.2% year-over-year and above Haywood’s $174.0-million estimate, with Adjusted EBITDA of $11.5-million in keeping with expectations. Gross margins had been 24.9%.

The corporate generated $2.9-million in free money circulation within the quarter and $16.8-million over the previous 4 quarters, which Gilmer described as an vital inflection level because the enterprise more and more funds its personal development.

The analyst mentioned the corporate’s retail section continues to carry out steadily, with same-store gross sales up 0.5% year-over-year and brick-and-mortar income accounting for 84% of whole gross sales, rising 10.3% year-over-year.

Worldwide operations are additionally gaining traction, pushed by the Remexian acquisition. The section contributed 14% of income and grew 155% sequentially, with gross sales of two.6 tonnes in February producing $12-million in income at roughly 20% margins. Market share of German imports elevated to 10.3%, up from 6.5% within the prior quarter.

Gilmer mentioned continued momentum in Germany, together with potential growth into new markets such because the U.Okay., may assist development into the again half of 2026.

He now expects Excessive Tide to generate $716.1-million in income and $53.9-million in Adjusted EBITDA in fiscal 2026, bettering to $800.2-million in income and $74.5-million in Adjusted EBITDA in fiscal 2027.

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Cantech Letter founder and editor Nick Waddell has lived in 5 Canadian provinces and is happy with his nation’s typically missed contributions to the world of science and expertise. Waddell takes an everyday shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications equivalent to Canadian Enterprise and Enterprise Insider.