Organigram (US:OGI) Seeking Alpha·2024-08-14 12:39Core Insights - Organigram Holdings reported Q3-2024 results showing a 25.3% year-over-year increase in net revenue to CA$41.1 million, driven by higher recreational cannabis sales [4][9] - The company achieved a significant improvement in net income, reporting CA$2.8 million compared to a loss of CA$213.5 million in the same quarter last year [4][9] - Organigram's stock has increased by 33% over the past twelve months and is currently trading below its net asset value (NAV) per share, indicating potential undervaluation [1][5] Current Operations - Organigram operates three grow facilities and one manufacturing facility, focusing on both adult recreational and medical cannabis markets [2] - The company holds the 3 market share position in Canada, with leading positions in milled flower, hash, and CBD gummies [2] - Organigram has expanded its international exports, supplying dried cannabis flower to countries including the UK, Germany, Australia, and Israel [2] Financial Performance - Q3-2024 net revenue was CA$41.1 million, up from CA$32.8 million in Q3-2023, with a gross margin increase from 19% to 36% [4][5] - The company reported a significant reduction in net loss, improving from CA$213.5 million to a net income of CA$2.8 million [4][5] - Cash and short-term investments increased to CA$80.1 million, while total liabilities stood at CA$58.9 million [5][7] Valuation and Market Position - The current price per share is US$1.88, with a book value per share of US$2.12, indicating the stock is undervalued [5][7] - Organigram's total enterprise value to revenue ratio is 0.82x, suggesting it is trading below its intrinsic value compared to peers [5][7] - The company has a median target price of US$3.26, reflecting potential upside [7] Competitive Landscape - Compared to peers, Organigram has lower liabilities relative to assets and has shown an improving net loss trend [7] - The company is positioned similarly to SNDL, with a strong market share in the Canadian cannabis sector [7] - Organigram's performance metrics indicate it is on par with other Canadian licensed producers, but future revenue growth remains a key focus [7][9] Future Outlook - The company is exploring international expansion and has invested CA$21 million in Sanity Group to enhance its European presence [2][9] - Organigram is updating its growing operations to improve yield and efficiency, with an average THC potency of 25.5% [2] - Investors are keenly awaiting further details on Organigram's potential US market entry strategy [9]