Zacks Small-Cap Research (Zacks SCR) has initiated coverage of cannabis company Vireo Growth with a target price of $1.50 per share, about 285% above current quotes. Recently, the company has completed acquisitions of three peers, which makes it one of the biggest players in the industry in the U.S. and could be a significant boost to revenue as early as the second half of this year, Zacks SCR argues. 

Details

Zacks SCR has started tracking Vireo Growth and sees its fair value at $1.50 per share. That is nearly 285% higher than the stock's closing price on Friday, June 20, of $0.39 per share. 

Rationale

Vireo Growth has reported closing three deals to acquire peers since the start of May: Wholesome on May 12, Proper Brands on June 5, and Deep Roots Harvest on June 9. The company now operates in six states (versus three previously) and has eight cultivation facilities and 38 dispensaries.

As a result, Vireo Growth ranks as the eighth-largest publicly traded cannabis company based on Zacks SCR 2026 revenue forecast, which is $474.4 million. Last year, Vireo Growth reported revenue of just $99.4 million. Earnings per share are expected to come in at positive $0.05 next year, versus a net loss of $0.16 per share in 2024. 

The company recently put out a corporate update with guidance only for the second quarter of this year: It guides for revenue to be at least 3.6 times the top line in the first quarter at $88 million and at most 3.7 times at $91 million. Adjusted EBITDA is guided to be 3.48-3.60 times the first-quarter figure. There was no net income guidance. In the first quarter, the company reported a loss of $6.5 million. Finally, Vireo Growth stated it believes "Its improved profitability profile is likely to help secure more favorable terms as it seeks to refinance its outstanding debt obligations." After the refinancing is completed, the company will have more than $100 million in cash.

"Our view is that once uncertainty related to the closing/integration of pending acquisitions fades, VREOF’s improving fundamental story will increasingly resonate with investors, thereby driving a material upward revaluation for the stock," argues Zacks SCR. Moreover, the stock is cheaper, having lost nearly 29% since the beginning of the year.  

Other views

Apart from Zacks SCR, only one analyst covers the company, according to MarketWatch. They also have a "buy" recommendation on Vireo Growth with a target price of $0.45 per share. This suggests upside of around 15% versus the last close.

The AI translation of this story was reviewed by a human editor.

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