Market MoversOn the Rise Green Thumb Industries Inc. increased after posting better-than-anticipated fourth-quarter financial results after the bell on Wednesday.
The Chicago-based cannabis company reported revenue of US$177-million, up 134 per cent year-over-year and exceeding the Street’s forecast of US$167-million. Gross margin improved by 3.17 per cent to 56.7 per cent, also topping expectations.
In a research note, BTIG analyst Camilo Lyon said: “As we look at the drivers of continued growth both near and long term, not only do we see an improving federal/legislative backdrop (Safe to Say SAFE is Coming Soon), but we also see continued positive momentum in GTII’s key markets (IL, PA, NV) that should be bolstered by forthcoming stimulus checks and increased travel (especially for the Las Vegas market), newly legalized markets (NJ) where GTII just opened its 2nd store, and soon to be legalized markets (NY with CT/PA likely thereafter). What’s more, as NJ and(and NY we expect too) begins adult use sales in earnest over the next 3-4 quarters (for now we model NY sales in ’22 of $74-million), we would expect gross margins to stay healthy in the mid-50′s range (and potentially migrate up) as greater scale efficiencies are realized on its cultivation assets that are not at full capacity (NJ) or have not yet been completed (NY). Taken together, we see GTII executing at a consistently high level as it expands its share position in its key markets (IL and PA) today while also investing in many robust future growth opportunities (NJ, NY, CT, and PA).”