High Tide Inc (HITI)

[JohnCM]

Semple said the deal gives High Tide shareholders a much-improved capital situation, where Meta had access to about $23 million in capital as of its last reported quarter. The new resources mean that High Tide won’t need financing over the next 12 months, according to Semple.

“We also believe there is reduced execution risk to store openings timelines for the combined entity. Whereas we called for 95 store openings by F2025 between the two separate companies, we now look for the combined Company to open 81 stores, suggesting a lower hurdle to achieving our operational/financial forecasts,” Semple said.

Semple’s new estimates have High Tide generating fiscal 2020 revenue and adjusted EBITDA of $80.5 million and $7.2 million, respectively, and fiscal 2021 revenue and adjusted EBITDA of $207.7 million and $25.7 million, respectively.

With the update on High Tide, Semple has reiterated his “Speculative Buy” for HITI while upping his target from $0.35 to $0.50, which at press time represented a projected one-year return of 178 per cent. In a separate report on Meta Growth delivered on Monday, Semple changed his recommendation on META from “Speculative Buy” to “Tender.”