Growth beating expectations, again; PT up

Scale to kick in. While Cantourage only announced sales figures, we would also expect a further improving margins as scale effects begin to kick in. We would expect an EBITDA margin of around 10% to be in the cards (for Q1) despite ongoing investments into growth.

No FY25 guidance issued yet. So far, management has not issued a guidance for the current year. We would expect a first FY25 outlook with the publication of final FY24 figures at the end of April. In light of the better than expected start into the year, unbroken demand and further de-bottlenecking efforts, we have increased our sales growth expectations from 67% to 81%, implying € 93m sales.

Easing political risks. Last week, Germany’s new government published the coalition agreement, which states an open-ended evaluation of the cannabis legalization law for autumn 2025. In our view, this is a clear positive and a return to the pre-April 1^st, 2024 legal framework or a reclassification of cannabis as a narcotic now appears increasingly unlikely, not only due to the high degree of complexity as well as a wave of lawsuits but also a seemingly low importance to the new law-makers (postponed discussions and only one sentence across a 146 page document).

Share price de-coupled from fundamentals. While operations have been strongly improving quarter over quarter for roughly a year, the valuation has decreased to some € 56m. Despite expected FY25e sale growth of 81% yoy, Cantourage should be able to reach a 10% EBITDA margin, implying an attractive EV/EBITDA multiple of 5.2x.

We confirm our BUY rating with a new € 13 PT (€ 12.50) based on DCF.