OrganiGram Holdings Inc. (NASDAQ:OGI) recently reported that its net revenue in the 2022 fiscal year increased 84% to CS$145.8 million ($107.9 million) from CA$79.2 million in the previous year primarily due to an increase in recreational and international revenue, partially offset by a decrease in medical sales.

CEO Beena Goldenberg attributed the revenue growth to the company's "innovative product launches, comprehensive retail distribution, sales execution, and operational excellence."

In his recent note, Cantor Fitzgerald's analyst Pablo Zuanic said that the company is sustainably gaining a share within the cannabis market.

"In the challenging context of the Canadian market, we think OGI remains one of the best operators," he said.

The Analyst

Zuanic retained an "Overweight" rating on the company's stock while keeping the price target of CA$2.90.

The Thesis

The analyst said that out of 19% sequential sales in the fourth quarter, which the company reported on Monday, 70% accounted for exports, even though adjusted gross margins dropped 1.4pt to 22.8%.

Now, the company's management expects additional sales growth in the next fiscal year.

"We believe it [company] will gain market share on the back of expanded capacity (it was capacity constrained in parts of FY22) and SKU innovation," Zuanic said, "For the Nov qtr, it guides for gross margin expansion (yields, efficiencies, and operating leverage post the expansion in the Moncton facility)."

Price Action

OrganiGram's shares traded 2.00% higher at $1.02 per share at the time of writing on Wednesday morning.

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