Green Thumb Earnings: Few Surprises as Adjusted EBITDA Margin Remains Strong

No-moat Green Thumb’s first-quarter results were particularly strong from a profitability perspective. First-quarter revenue was again roughly flat sequentially, and the company maintained a 33% adjusted EBITDA margin, the second quarter in a row hitting the highest margin it has ever achieved. As in the fourth quarter, the company continued to make progress operationally, as demonstrated in its gross margin, improving another 200 basis points to 53%. As we forecast the adjusted EBITDA margin to approach the mid-30% range on a run-rate basis, we don’t expect to make a major change to our long-term forecasts or fair value estimates of $24 and CAD 32 per share.