Analyst Note| Kristoffer Inton |
Inflation pressure weakened in Green Thumb’s second quarter, leading to stabilization in sales and margins compared with the contraction in the first quarter. Revenue was up 5% sequentially, buoyed by sequential comparable growth of 10%. This compares with flat first-quarter sequential revenue growth and a 6% decline in sequential comparable sales as inflation pressured cannabis’ share of wallet. Adjusted operating EBITDA margin recovered nicely to 31%, after having shrunk massively to 28% during the first quarter. We’ve made slight adjustments to our forecasts, but not enough to change our U.S. dollar-denominated fair value estimate of $45 per share for no-moat Green Thumb. Our Canadian dollar-denominated fair value estimate rises to CAD 58 from CAD 57 on exchange rate changes.