The Numbers Game: Revenue and EBITDA Analysis
Earnings for the 4th quarter of 2023 have been unveiled, showcasing mostly positive results. Surprisingly, the market responded sensibly to the EBITDA beats, with a notable correlation of .75 between EBITDA surprises and stock performance.
The graph illustrates the % revenue beat (blue bar), % EBITDA beat (yellow bar), and the percent revision to 2024 EBITDA estimates (purple bar). The green line denotes the net percent change in the company’s stock price before and after the release, adjusted for the MSOS ETF changes during the same period.
The companies surpassed aggregate revenue estimates by 1.05% and EBITDA estimates by 7.07%.
Particularly noteworthy EBITDA beats include:
Green Thumb GTBIF exceeded EBITDA estimates by 14%, driven by robust performance in Maryland boosting the retail segment.
Trulieve TCNNF outperformed EBITDA estimates by 22.3%, pointing to cost control and margin improvements.
However, there were some significant EBITDA misses:
Marimed MRMD fell short of EBITDA estimates by around 25% due to supply chain-related construction delays.
Cannabist CBSTF missed consensus EBITDA estimates by approximately 38%, attributing it to margin contraction from inventory discounts and facility underutilization.
TerrAscend TRSSF also missed EBITDA estimates by 17.6%, citing cultivation issues and a lower margin forecast for Q1.
Analysts have downwardly revised their 2024 EBITDA estimates for the sector by around 1%, primarily due to lower revenue growth. Forecasts now project 3.8% revenue growth and an EBITDA margin expansion from 24.8% to 25.9%, with a positive outlook for enhanced margin expansion.
Insights from Viridian Capital and the Cannabis Deal Tracker
The Viridian Capital Chart of the Week dissects vital investment, valuation, and M&A trends sourced from the Viridian Cannabis Deal Tracker.
The Viridian Cannabis Deal Tracker offers market intelligence to aid cannabis firms, investors, and acquirers in making informed decisions on capital allocation and M&A strategy. This service monitors capital raises and M&A activities in the legal cannabis, CBD, and psychedelics industries.
- Deals by Industry Sector
- Deal Structure and Company Status
- Principals to the Transaction and Key Deal Terms
- Location of Issuer/Buyer/Seller for Capital and M&A Deals
- Credit Ratings and Financial Metrics
Since its launch in 2015, the Viridian Cannabis Deal Tracker has analyzed over 2,500 capital raises and 1,000 M&A transactions totaling over $50 billion.
