Equity research firm Zuanic & Associates, led by senior analyst Pablo Zuanic, has initiated coverage of cannabis company Verano Holdings Corp.(OTC: VRNOF) with an Overweight rating. Verano is the 3rd largest Multi-State Operator (MSO) by EBITDA and the 4th largest by sales in the cannabis industry.
“The current MSO average of 5.3x 1-year forward EV/EBITDA seems out of place in a market that has the potential to grow tenfold by 2030 in a bullish scenario or at least double by 2027 (…) In the absence of regulatory changes such as SAFER, we seek out undervalued stocks with above-average EBITDA per share growth potential,” Zuanic wrote.
“Verano meets both of these criteria. We believe the stock's valuation discount, currently at 17% on a 1-year forward EBITDA basis at 4.4x, is unjustified given the company's outstanding metrics in terms of profitability, cash flow, balance sheet strength, promising growth trends in recent performance and future prospects, and its significant market presence."
Strategy And Footprint
The company operates in 13 states, including recent recreational states like New Jersey, Connecticut, and Maryland. It boasts a significant retail presence with 135 stores and 1.1 million square feet of cultivation capacity. The recent switch of its listing to the Cboe Canada from the CSE is expected to improve …