Key Morningstar Metrics for Curaleaf Holdings
- Fair Value Estimate: C$4.40
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: Very High
What We Thought of Curaleaf Holdings’ Earnings
Curaleaf Holdings’ CURA fourth-quarter revenue grew 2% year over year to USD 333 million. International revenue contributed USD 51 million (a 65% increase) to offset domestic’s 5% decline (to USD 282 million). Price compression continued, with Curaleaf’s markets again suffering double-digit percentage declines.
Why it matters: Price compression continues to plague the industry, though Curaleaf’s product innovation has blunted the impact on its sales. We think there’s an eventual bottom, as falling prices will force small producers to close and supply will drop.
- A stubborn illicit market, an unregulated hemp-derived market, and hemp-derived THC beverages continue to hurt the legal cannabis industry. Curaleaf has guided for a mid-single-digit revenue decline in the first quarter due to seasonality, and prices continue to fall.
- Lower prices hurt Curaleaf’s bottom line as well, with adjusted EBITDA margin shrinking 250 basis points to 20.7%. Longer term, we expect margin to reach the low 30s as prices stabilize and the international business scales.
The bottom line: We don’t expect major changes to our USD 3.15/C$4.40 fair value estimate for no-moat Curaleaf or our prerelease forecasts for 6% average annual revenue growth through 2034 and long-term adjusted EBITDA margin of 32%.
- The shares have fallen by more than 30% since President Donald Trump signed an executive order on Dec. 18, 2025, directing the federal government to reschedule cannabis. Optimism about easing prohibition has waned as investors appear concerned about price compression.
- The shares appear undervalued. We don’t think US price compression can continue indefinitely, and Curaleaf should benefit from industry consolidation. Moreover, as the international business scales, we expect its margin to approach that of the domestic business, benefiting companywide margin.
