TLLTF - TILT's Bull vs. Bear Case: EBITDA Potential In Its Cannabis Business - Analyst Insights | Benzinga
Zuanic & Associates (Z&A), an equity research firm has initiated coverage of TILT Holdings (OTC: TLLTF), a micro-cap stock with a $12 million market cap, with an Overweight rating.
TILT’s EBITDA Potential
Senior Z&A analyst Pablo Zuanic highlighted the underappreciated value of the vape hardware franchise (Jupiter Research unit) and potential synergies between TILT's plant-touching and vape divisions. Additionally, a recent balance sheet restructuring contributed to increased investor confidence.
While positive U.S. federal reform could re-rate the entire sector, TILT offers both mispricing compared to peers and the potential for above-average EBITDA/share growth.
Zuanic noted TILT's stock valuation discount, at 0.4x 1-year forward EV/Sales, stands in contrast to the peer group's 1.2x average.
Cannabis Business Strategy
According to Z&A TILT's cannabis business is gaining momentum in Massachusetts, Ohio and Pennsylvania. Half of cannabis sales come from company-owned brands, with the rest from "partner brands."
The company's asset-light strategy aims to build a robust brand portfolio.
TILT leverages its sister unit, Jupiter Research, which distributes vape hardware in 39 states. This strategic move fosters relationships with brands and cannabis companies, creating potential brand partnership opportunities for TILT.
Jupiter Research is the largest CCELL distributor of vape hardware in the US. With annualized sales of around $120 million, Jupiter holds a mid/high teens share of the US cannabis vape hardware market.
"Jupiter sells inhalation hardware in 39 states and 15 countries; in total, it has supplied more than 1,000 brands across the world (the products are used in CBD, medical, and recreational cannabis),” Zuanic wrote. "Jupiter supplies over 15 ...