High Tide HITI Stock Forecast & Analysis

High Tide HITI stock forecast is for $54.90 as High Tide is set to increase revenues to some $250M in 2022; up from ~$180M.  With such a large increase in revenue, High Tide stock HITI will move up considerably.  But, for now, there is a lag in gross margins, operating efficiencies, and finally EBTIDA profits.  However, with the increased revenues, with more products moving through the system, maximizing operations, will increase margins.  If you were to look at this as a growing process, with High Tide continually ramping up, this is the beginning of something that looks like will turn into a big move upwards for HITI stock.  Visit the HITI Stock Forum & Discussion for more.

Also, there are two outlying factors that bear mentioning:

Both of these have the ability to move markets beyond what could be practical.  So, when you look at cannabis at this time, you see that there is plenty of reason to invest in cannabis right now.  With federal legalization of cannabis set for 2022, and with the potential of widespread use of cannabis to cure & prevent COVID, there is so much that will push cannabis stocks up this year.

At the same time, cannabis stocks, by and large, are undervalued.  If momentum begins to pick up, cannabis stocks may see a very big rush as investors try and catch up to the moves.  Investors today will be grateful they maintained vigilance in their long-term belief in the cannabis industry.

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High Tide HITI Financial Data

Here is a breakdown of High Tide Q4 financial data.

High Tide Gross Profits

  • High Tide Q3 Q3 Revenue

High Tide’s revenue looks impressive.  Management is stating a run rate that should hit about US$220M for 2022.  But, I believe they will hit approximately $250M.  Also, it is also possible that High Tide exceeds this; I have seen individuals come with projections of nearly $300M.  As the quarters move through I will continually evaluate HITI stock forecast for a more precise number.

Also, management has already stated that for the next quarter they are printing some $54M, a significant increase.  This may provide a significant boost to gross margins.

In the meantime, looking at gross margins, there is significant upside potential here.  High Tide produces some 7,500 SKUs that are sold in its dispensaries.  High Tide is very much in control of its own margins because of this.  So, I can see that margins will improve.  Still, I used a modest margin rate when putting this projection together.

High Tide Operating Profits

  • High Tide Q3 (HITI) Operating Costs

Operating profits & operating margins are similar to gross margins that on a per-revenue basis, there is room for improvement.  At 52%, this is higher than optimal.  But, if they maintain the very same operating costs and push revenues upwards as they are already stating they are printing $54M for the upcoming quarter.  Given that, if operating costs remain contained, this could improve the 52% (move it downward) to a better number.  Keep in mind, 30% – 35% is where some of the best companies are printing.

The latest print was for $20M in total operating costs.  But, from the upcoming $54M print, if operating costs remained $20M, the brings OPerating Efficiencies down to 38%; a far more competitive number.

High Tide EBTIDA & Net Profits

  • High Tide Q3 EBITDA

EBITDA is low.  This is owed to both lower gross margins and elevated operating costs relative to revenue.  This is where I expect to see the biggest improvements.  With the big jump in revenue, gross margins will more than likely improve simply because costs are already being paid for by the first units being pushed through the system.  And, if operating costs remain contained, on a relative basis, this will add to the bottom line.

Given this, I am anxious to see next quarter’s print to see what improvements there will be.  I believe High Tide is just on the cusp of profitability.

High Tide Cash On Hand

  • High Tide Q3 Cash: Debt Ratio

From a debt ratio basis, High Tide is very competitive as they have ample cash at this point with low debt.  Cash burn is low at about $1M per quarter.  So, High Tide should not need to either increase cash via debt or stock sale.  And, the burn rate is low enough that more than likely High Tide will achieve profitability and add to a net change in working capital more and more.

Hight Tide Total Equity

  • High Tide Q3 Total Liabilities

With total equity at $170M, and a market capitalization at some $250M, this is about correct.  The big jump in the latest data points shows that High Tide is continually adding to shareholder value.  But, HITI stock has not seen an in-kind move upwards.  That may change shortly, however.

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High Tide HITI Stock Forecast

High Tide Inc--High Tide Announces -15-0 Million Bought Deal Pub
Company Logo High Tide Inc, Logo

The methodology for coming up with the HITI Stock forecast is from a discounted cash flow statement.  I break down the individual areas.  And, I used the run-rate mentioned by management for 2022, ~$225M.  But, I believe that High Tide has the ability to exceed that and so I am looking for ~$250M this year.  Also, margins have not been at their very highest yet.  My analysis did not factor in top-performing margin rates.

The bottom line is that from a Discounted Cash Flow basis, HITI Stock forecast would push HITI stock upwards.

High Tide HITI Stock Forecast

Is High Tide HITI A Good Investment?

High Tide HITI Stock Forum & Discussion For cannabis stocks & cannabis investments

One of the things I have always said about High Tide is that they will likely get acquired by a major US MSO.  If they do not get acquired first, they could also partner up with a major US MSO first as a strategic partnership.  This could be the first step towards an acquisition or merger.  This is one of the main reasons I have always had High Tide as a top pick.

The two aforementioned reasons that I see cannabis investments as a great investment are first that Federal Legalization of Cannabis will happen in 2022.  This will push pot stocks up in a big way. And, if Cannabis Cures COVID also proves to be a phenom that takes hold, this also will push cannabis stocks upwards.

But, without any of that (High Tide is primarily a Canadian company), High Tide is an undervalued cannabis company with big upside potential.  That alone makes this HITI stock a solid long-term holding.  Then, if the other three factors; acquisition, cannabis federal legalization, & cannabis cures COVID, this will add rocket fuel to a stock that has upside potential.

In the meantime, valuations for all cannabis stocks are misaligned with basic fundamentals.  This is a process that will take to work through.  But, I see a lot of momentum in the cannabis industry right now.

High Tide HITI Financial Data

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4 thoughts on “High Tide HITI Stock Forecast & Analysis

    1. I too have felt frustration, especially looking at what “could have been” with stocks I held before discovering cannabis stocks, High Tide in particular. I need to stand by the thesis that, this will change at some point. 

    2. @Anthon Crane

      Yes… the frustration is real.  But, it is driven not necessarily because of the performance of any one stock, per se.  But, the lack of movement is driven more so by the collective moves of the entire industry.  These stocks will move.  It will take time for this process to happen.  But, the long term performance of stocks like High Tide will surpass what other stocks would do in the same period of time.

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