Scaling and luckily printing cash

 

We are expecting consistent revenue growth that will later stabilize at 5% after a period of sustained expansion (2023 - 2026). Margins will also follow expansion as economies of scale kick-in and will stabilize at 18% for the long term. This model also forecasts Capex requirements at around 2-3% of revenues, which is in line with what happened in the past. 

We believe that the company will not stop pursuing straThese are the results of our analysis. Assuming a perpetual growth rate of 1%, the sum of the present and terminal values is around $400 million of total value. After subtracting roughly $60 million of debt we derive an equity value of $344 million, or $4.9 per share. This represents an upside of 25% from the current price.

Glass House is at an exciting inflection point, with production now ramping up and the distribution channel completely expanded and operative. The company has demonstrated a strong ability to execute and deliver, and has strong competitive advantages that can set the company on a prosperous path. The stock seems undervalued with an upside potential of around 25%.