Largest Cannabis Co. Curaleaf's $1.5B Projected Revenue For 2025: Analyst Raises Rating To Outperform

Wedbush Securities released a report on Curaleaf Holdings, Inc. CURLF, the largest U.S. cannabis company by market cap, raising the stock's 12-month price target to $7.00 from $6.00 and maintaining a buy recommendation (Outperform rating).

Key Financials And Rating

Curaleaf's market cap stands at $4.12 billion with an enterprise value of $4.60 billion. The company reported Q1 2024 revenue of $338.9 million, aligning with expectations, and a sequential improvement in gross margin.

The projected revenue for 2024 is $1.40 billion, with adjusted EBITDA expected to be $339 million, according to the report, authored by analysts Gerald Pascarelli and Antoine Legault.

Domestic And International Expansion

Curaleaf continues to benefit from strong performance in key domestic markets such as Connecticut, Arizona, Maryland and New York. The report highlights upcoming catalysts, including the adult-use rollout in Ohio and potential expansion in Florida, contingent on a November ballot initiative.

Internationally, Curaleaf's operations have exceeded expectations following Germany's removal of cannabis from its narcotics list.

The company anticipates international revenue to reach $100 million in 2024, with further growth expected in 2025 and beyond, particularly in Germany, the UK, and Poland.

New Product Lines

Curaleaf is set to launch a new line of hemp-derived THC beverages and edibles under its Select brand in the second half of 2024. While not expected to contribute significantly to short-term revenue, this move is seen as a long-term growth opportunity, opening new markets and potentially improving margins.

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Updated Guidance

Curaleaf's quarterly revenue is expected to grow consistently throughout the year, with Q4 projected at $362.6 million. For 2025, the annual revenue is forecasted to increase to $1.50 billion.

Curaleaf has reiterated its 2024 outlook, projecting mid-single-digit revenue growth and adjusted EBITDA margins in the mid-20s. Capital expenditures for 2024 are forecasted between $50 to $70 million, depending on the outcomes of adult-use expansions and Florida initiatives.

Wedbush has adjusted its estimates, lowering 2024 EBITDA to $339 million, a 9.35% increase from 2023's $310 million, but raising 2025 EBITDA to $404 million, reflecting anticipated improvements in profitability.

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