Reconfirming Buy Rating: MariMed

We reconfirm MariMed as a “Buy” due to its position in the fast-growing cannabis industry, which will likely benefit from favorable regulatory changes. Within this industry, MariMed stands out with a strong balance sheet and a leading track record of revenue growth. Over the last twelve months, management has reinvested heavily in the business by increasing spending on SG&A and CapEX, anticipating future revenue increases. The stock is currently undervalued, and significant additional value could be realized with changes in 280E taxation rules.

Strengths of MariMed Compared to Its Peers

MariMed demonstrates solid financial health with a high current ratio, lower liabilities-to-assets ratio, and better credit rating than its peers. The company’s gross profit margin is above the median and average of its peers, reflecting effective cost management. MariMed also shows strong revenue growth, with short-term and long-term rates outperforming its peers. This highlights the company’s operational efficiency and market competitiveness.

Weaknesses of MariMed Compared to Its Peers

MariMed faces some challenges in operational efficiency, with recent EBITDA growth below the industry average. Additionally, the increase in SG&A margin and leverage has increased the risk profile, but management feels it is prudent as an investment for future revenue growth.

Our Forecasts

We rate MariMed as a “Buy” based on our analysis due to its strong comparable financial health and growth potential. MariMed’s blended fair value is calculated to be $0.63, offering a potential upside of 186% from its current price of $0.22. This valuation incorporates its revenue growth strengths, market expansion catalysts, and likely federal rescheduling. These factors suggest a promising return on investment for shareholders.