Several market commentators have recently noted that the consensus analyst revenue estimates for the large MSOs have declined by low single-digit percentages since November.
We decided a longer time view was appropriate and that EBITDA was more critical than revenues. We looked at the nine largest market cap MSOs and investigated analysts’ projected 2022 EBITDA and EBITDA margins a year ago, compared to their forecasted 2022 results today.
The graph shows the percentage revisions in EBITDA (green bars) and EBITDA margins (orange dot). The blue line shows the performance of each company’s stock relative to the performance of the MSOS ETF (blue line).
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Analysts have made sharp reductions in their EBITDA estimates for Curaleaf (CSE:CURA) and TerrAscend (CSE:TER) and moderate decreases for AYR (CSE:AYR), Cresco (CSE:CL), and Jushi (CSE:JUSHF). Estimates for Columbia Care (CSE:CCHW) and GTI (CSE:GTII) are virtually unchanged, and Verano and Trulieve estimates are higher.
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M&A activity had a significant impact on some of these revisions. Trulieve and Verano completed $1.5B and $630M, respectively, in acquisitions over the period. But even some major acquirers had their EBITDA revised downward sharply. For example, AYR completed $1.0B in acquisitions, and analysts have revised their 2022 EBITDA projections downward by 8%.
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The missing link is margins (shown by the orange dot. All the companies on the list, except for Curaleaf and TerrAscend, have higher 2022…
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Several market commentators have recently noted that the consensus analyst revenue estimates for the large MSOs have declined by low single-digit percentages since November.
We decided a longer time view was appropriate and that EBITDA was more critical than revenues. We looked at the nine largest market cap MSOs and investigated analysts’ projected 2022 EBITDA and EBITDA margins a year ago, compared to their forecasted 2022 results today.
The graph shows the percentage revisions in EBITDA (green bars) and EBITDA margins (orange dot). The blue line shows the performance of each company’s stock relative to the performance of the MSOS ETF (blue line).
-
Analysts have made sharp reductions in their EBITDA estimates for Curaleaf (CSE:CURA) and TerrAscend (CSE:TER) and moderate decreases for AYR (CSE:AYR), Cresco (CSE:CL), and Jushi (CSE:JUSHF). Estimates for Columbia Care (CSE:CCHW) and GTI (CSE:GTII) are virtually unchanged, and Verano and Trulieve estimates are higher.
-
M&A activity had a significant impact on some of these revisions. Trulieve and Verano completed $1.5B and $630M, respectively, in acquisitions over the period. But even some major acquirers had their EBITDA revised downward sharply. For example, AYR completed $1.0B in acquisitions, and analysts have revised their 2022 EBITDA projections downward by 8%.
-
The missing link is margins (shown by the orange dot. All the companies on the list, except for Curaleaf and TerrAscend, have higher 2022…
