OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Chart of the Week
Chart of the Week
The Viridian Capital Chart of the Week highlights key investment, valuation and M&A trends taken from that week’s Deal Tracker that we believe are impactful for investors, companies and acquirers.
Week ended 08/02/2024
Viridian Capital Chart of the Week: Do Analysts’ 2024 EBITDA Revisions Make Sense in Light of Q1 Beats?
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- The majority of MSO Q2: 24 earnings will be reported over the next two weeks. Accordingly, the Viridian Chart of the Week looks at the percentage beat (misses) on Q1 EBITDA vs. analysts’ subsequent revisions to 2024 full-year EBITDA estimates.
- The green bars depict the percent beat (miss) on consensus Q1: 24 EBITDA estimates. The graph is arranged in increasing order of Q1 EBITDA beats. The orange bars show the 2024 EBITDA revisions percentage from 3/31/24 to 8/2/24.
- The revisions generally show a reversion to the mean. Eight of the thirteen MSOs on the graph beat consensus Q1 EBITDA estimates. In each case, analysts revised the full-year EBITDA estimates by significantly less than the percentage beat for Q1.
- In three cases, AYR Wellness (AYR.A: CSE), TerrAscend (TSND: TSX), and Vireo (VREO: CSE), analysts reduced their full-year EBITDA estimates despite 1st Quarter EBITDA beats.
- Over the last two weeks, analysts have reduced Q2: 2024 EBITDA estimates for six of the thirteen companies on the chart and have only increased estimates for three, most likely due to steering from the companies to increase the odds of beating estimates.
- We continue to believe that analysts are playing it safe for 2024, downplaying potentially significant impacts from Ohio and being too quick to respond to MSO conservatism.