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Green Thumb Industries GTBIF stock Forecast & Analysis

Green Thumb Industries GTBIF Stock reported its earnings earlier and, revenues for the year beat analyst expectations to $893M with EPS hitting $0.10 versus $0.08 expectations.  Green Thumb Industries should absolutely be a consideration for your cannabis investments as they are one of the best cannabis stocks to buy and I have the GTBIF stock forecast.  From this, Green Thumb Industries GTBIF stock has the ability to propel the entire industry.  The initial news saw GTBIF stock move upwards.  However, with the conflict in Eastern Europe, those moves were quickly wiped out.

To me, Green Thumb Industries is an important stock due to its size and market reach.  They are in 15 different states as of this writing; that will continually climb.  Because of its position in the cannabis industry, Green Thumb Industries, should GTBIF stock respond to the earnings and move higher, will very likely drive all other cannabis investments.

There will be a point when the shock and awe of the situation in Eastern Europe will settle down and investors will get back to the basics with regard to investments in the United States.  Earnings will shift for some companies, such as oil and banks.  And, other companies outside of the immediacy of the conflict will move higher again.

This is when I see companies like Green Thumb Industries GTBIF stock being a bellwether that can drive cannabis investments.  GTBIF stock is an important stock and as the quarters continually roll through, and Green Thumb Industries prints continued increases in revenues & profits, investors will respond.

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Green Thumb Financial Data

Here is a breakdown of Green Thumb Industries Q4 financial data from Green Thumb Industries.

Green Thumb Industries Gross Profits

  • Green Thumb Industries Cost of Goods

As you can see, continued revenue keeps propelling the company.  However, many of us were working on the impression that there would be forward guidance for 2022 revenues.  All we heard was “Up and to the right”.  I have no idea how to quantify that in terms of what to use as a forward revenue forecast.  So, many analysts have forecast $1.13B – $1.14B for 2022.  I can work with that as it is within the wheelhouse of Green Thumb Industries given its foundation.

In the meantime, gross margins popped up slightly to 55% for the year according to the press release.  Despite that, gross margins only came in at around 51.5% for Q4.  But, Green Thumb Industries will see organic growth in its dispensaries.

Think that through: the rent is already paid in these dispensaries and grow facilities.  But, if you push through 25% more product, this will have outsized marginal profits.  These additional profits will drive margins upwards.  That is what I am focusing on for now.

Green Thumb Industries Operating Profits

  • Green Thumb Industries Operating Costs

If a company achieves the 30% – 35% level in operational costs relative to revenues, you are performing in the top-tier.  Given that Green Thumb Industries has such a low number – Operating efficiencies are a ratio; you are always looking for the lowest possible operating costs relative to revenue – there is a lot of room to add to sales marketing costs if it could drive revenues higher.  At 31%, this puts Green Thumb Industries at the top of the heap with such a low number; albeit not #1.

This metric shows how well-positioned Green Thumb Industries is.  This, especially considering it is the second-largest cannabis company.

Green Thumb Industries EBTIDA & Net Profits

  • Green Thumb Industries EBITDA

Look for continued increases in organic growth at dispensaries and, from that, the marginal profits will drive EBTIDA higher.  Then, this trickles down to net earnings, or net profits.  This, to me is where the real opportunity lay with a cannabis investment of GTBIF stock.  Should Green Thumb Industries start to increase gross margins, which are not bad, by any stretch, and Green Thumb Industries starts to push upwards to the mid 60% area, that is pure profit potential.  GTBIF stock is a well-positioned cannabis investment.

Green Thumb Industries Cash On Hand

  • Green Thumb Industries Cash on Hand

Green Thumb Industries has zero concern in the cash-on-hand and cash-to-debt ratio.  As the company is cash-flow positive, they will be bringing in more and more profits.  Look for Green Thumb Industries to increase both CapEx & M&A activity with their continually building war chest of cash on hand.

Green Thumb Industries Total Equity

  • Green Thumb Industries Total Assets

Looking towards total equity, assets less liabilities, this is where you look to see how well management is increasing shareholder value, although not the only resource.  As assets accumulate, they are the engine of producing revenue.  And, as long as there is enough revenue scaled up to be profitable, this drives total equity.  This is one place that shows how shareholder value is created.

As mentioned, continued profits will enable Green Thumb Industries to embark on many projects of asset growth including acquisitions and CapEx with new dispensaries.

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Green Thumb Industries Stock Forecast

Green Thumb Industries GTBIF Stock DCF

I have already done the DCF and my target for GTBIF stock forecast is $99.08.  But, while calculating the DCF, I also backed off from the EV/EBTIDA levels that are used in calculating the future stock forecast.  I used 40x.  This could easily have been pushed to 50x, if not higher.  And, if cannabis investments start to get hot, I will likely push this higher showing the potential of GTBIF stock.

But, investing is a popularity contest.  Cannabis investments are not necessarily popular at this moment despite the intrinsic value of these stocks.  But, the market will not ignore profits forever.  As Green Thumb Industries continues to print its revenues and profits over the course of the coming quarters, savvy investors will wake up to the realities of cannabis investments.

I may easily update the coming GTBIF stock forecast in the coming quarters.

Is Green Thumb Industries GTBIF Stock A Good Investment?

 

Ultimately, GTBIF stock should be far higher.  While I believe that this is an undervalued cannabis stock, its status as one of the key cannabis investments is disheartening to see as low as it is.  But, that will not be the case forever as the market will not ignore profits forever.

I do not own GTBIF stock nor, is GTBIF stock in my Top Picks.  That is not to suggest it is not a bellwether that should be, but more an idea that I am well positioned in the sector.  If you hold GTBIF stock, you are sitting on a lot of potential.  Hold this for some time.

Over a very long period of time, I fully expect that Green Thumb Industries will perform as the top-tier cannabis investment that it is.  I also expect that they will acquire many other smallish companies and because of that eventually I will own GTBIF stock via acquisition.  As these other cannabis stocks are ultra-low, and so is GTBIF, it is like getting an item at a discounted price with the ability to take off an additional percentage at the cash register.

I am fine with that.

Green Thumb Industries Stock Financial Data

Green Thumb Industries GTBIF Stock Financial Statements

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