MariMed has price target chopped at Ventum

Following the release of the company’s fourth quarter results, Ventum Capital Markets analyst Andrew Semple has cut his price target on cannabis player MariMed (MariMed Stock Quote, Chart, News, Analysts, Financials OTCBB:MRMD).

On March 5, MRMD reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted (Non-GAAP) Adjusted EBITDA of $5.9-million on revenue of $39.0-million, up slightly from last year’s $38.9-million.

“We’re pleased to report record revenues and improved adjusted EBITDA for MariMed,” CEO Jon Levine said. “I continue to believe we own one of the strongest portfolios of cannabis brands in the industry, which helped us drive annual wholesale revenue growth of 29 percent. Our brands continue to gain market share in all our core markets, with Betty’s Eddies™ fruit chews currently the top-selling edible in Massachusetts and Maryland. Looking ahead to 2025, we have a number of levers to fuel our growth, including: a full year of financial contribution after completing the build-out or expansion of 10 revenue-generating assets over the past two years; continued wholesale gains in Illinois, Missouri, and Maryland; the consolidation of Delaware’s First State Compassion Center into MariMed as the state prepares for adult-use sales; and accretive M&A activity that will support expanded market penetration for our brands in new and existing states.”

Semple summed up the development.

“MariMed Inc. reported Q4/24 results that missed our expectations, though they were within the guidance range provided by management in November,” he wrote. “Sales declined by 3.9% QoQ as pricing pressures remained a headwind and as retail sales slid 5.2% QoQ (7.1% lower YoY) despite two new stores added in Q3/24 as well as the first full quarter contribution from Ohio adult-use sales. Adj. gross margins and EBITDA grew QoQ as the Company delivered on the cost efficiencies that we were hoping for, though both metrics still printed below our estimates.”

In a research update to clients March 6, the analyst maintained his “Buy” rating on MRMD, but cut his price target from (US) $0.40 to $0.25, implying a return of 138.1% at the time of publication.

Semple thinks the company will post Adjusted EBITDA of $26.0-million on revenue of $164.8-million in fiscal 2025.

“We believe the focus for MariMed in 2025 should be on returning business to growth while maintaining opex and capex discipline. This should be achieved through better asset utilization from new facilities developed over the past two years.”