Decibel Cannabis Q3 profit beats estimates on higher international sales

Overview

• Decibel Q3 net revenue rises 37% yr/yr, driven by AgMedica's international sales

• Adjusted EPS for Q3 beats analyst expectations

• Adjusted EBITDA for Q3 increases 40% yr/yr, driven by international and Canadian sales growth

Outlook

• Decibel anticipates 2025 net revenue of approximately C$115 mln

• Company expects 2025 Adjusted EBITDA of about C$24 mln

• Decibel revises guidance due to regulatory and distribution challenges

Result Drivers

• INTERNATIONAL SALES - AgMedica's contributions accelerated international sales, totaling C$7.8 mln

• CANADIAN SALES INITIATIVES - Modest growth in Canadian recreational sales driven by new marketing campaigns and product launches

• GROSS MARGIN DECLINE - Lower gross margin due to higher testing costs and product types in international sales

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the pharmaceuticals peer group is "buy"

• Wall Street's median 12-month price target for Decibel Cannabis Company Inc is C$0.25, about 48% above its November 18 closing price of C$0.13

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 4 three months ago

Press Release: ID:nCNW2k60va

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