Green Growth Brands: Analysts’ Ratings and Target Price


Jan. 17 2020, Updated 8:40 a.m. ET

As of Thursday, Green Growth Brands (NYSE:GGB) was trading at 0.72 Canadian dollars—a fall of 39% since reporting its first-quarter earnings for fiscal 2020 on November 25. During the quarter, the company reported net losses of $30.2 million. Also, on December 18, the company terminated the previously announced acquisition of MXY Holdings. Along with these factors, weakness in the cannabis sector could have caused the company’s stock price to fall. Let’s look at analysts’ recommendations.

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Analysts’ target price for Green Growth Brands

As of Thursday, analysts’ consensus target price is 3.75 Canadian dollars. The target price implies a 12-month return potential of 420.8% from its stock price of 0.72 Canadian dollars. In the above graph, you can see that there has been a gradual decline in analysts’ consensus target price since August 2019. Since August 17, analysts’ consensus target price has fallen by 55% from 8.33 Canadian dollars.

In the last 30 days, two analysts lowered their target prices. On Tuesday, Eight Capital reduced its target price from 5 Canadian dollars to 2 Candian dollars. Earlier, on December 18, Canaccord Genuity lowered its target price from 2.10 Candian dollars to 1.75 Candian dollars.

As of today, Charlotte’s Web Holdings (NYSEARCA:CWEB), Cresco Labs (NYSE:CL), and Curaleaf Holdings were trading at a discount of 38.9%, 90.8%, and 70.8% from their respective target prices.

Analysts’ ratings

As of today, three analysts cover Green Growth Brands. All three of the analysts favor a “buy” rating for the stock. There hasn’t been a change in analysts’ ratings since the company reported its first-quarter earnings on November 25.

As reported by Cantech Letter, Corey Hammill of Paradigm Capital, who has a “buy” rating, is bullish on Green Growth. As of November 28, he had a 12-month target price in the range of 3.50 Canadian dollars–4.50 Canadian dollars. He’s bullish on management’s retail expertise and the company’s expansion of its CBD and multi-state operation business. Hammil expects the company to report revenue of $98.7 million–$109.1 million in fiscal 2020. He expects the company’s fiscal 2020 EBITDA to be -$21.3 million to -$52.8 million.

Let’s look at analysts’ ratings for Green Growth’s peers:

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  • Analysts are bullish on Charlotte’s Web. Eight of the ten analysts favor a “buy” rating, while two analysts have a “hold” rating.
  • For Cresco Labs, all of the 11 analysts that follow the stock have given it a “buy” rating. To learn more, read Why Beacon Securities Thinks Cresco Labs Is Cheap.
  • Analysts are also bullish on Curaleaf. Seven of the eight analysts recommend a “buy” rating, while one analyst recommends a “hold” rating.

Analysts’ estimates for Green Growth Brands

For fiscal 2020, analysts expect Green Growth to report revenue of $97.4 million, which represents a rise of 519.5% from $15.7 million in fiscal 2019. They expect the company’s revenue to rise by 248.1% to $339.2 million in fiscal 2021. We expect that opening more dispensaries and CBD shops across the country will drive the company’s revenue.

Analysts expect Green Growth to become profitable in fiscal 2021. In fiscal 2020, they expect the company to report a negative EBITDA of $80.2 million. However, in fiscal 2021, they expect the company’s EBITDA to improve to $77.0 million.


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