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Can TerrAscend Deliver a Solid Q3 on Core Market Strength Ahead?
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Key Takeaways
TSNDF's Q3 is expected to benefit from strong retail and distribution momentum in the Northeast.
TSNDF may see margin gains from higher throughput in Maryland and New Jersey and better cost control.
TSNDF's exit from Michigan and targeted M&A could support a leaner, growth-focused operating base.
TerrAscend Corp. (TSNDF - Free Report) is scheduled to report third-quarter 2025 resultson Nov. 6, before the opening bell. In the last reported quarter, the company’s loss per share of 3 cents missed the Zacks Consensus Estimate by 50%.
Let us check out the factors that might have shaped TSNDF’s performance prior to the announcement.
Factors to Note Before TSNDF’s Third-Quarter Earnings Report
Core Market Momentum in the Northeast United States
TerrAscend’s third-quarter earnings are likely to be supported by continued strength in its core Northeast footprint, including New Jersey, Maryland and Pennsylvania. Management noted that retail trends have improved, distribution has broadened, and Maryland’s cultivation and manufacturing platform is now operating at a high-margin run-rate during the second-quarter earnings call. The third-quarter results are likely to reflect whether these regions can sustain the momentum from the second quarter, particularly as the company deepens consumer engagement and expands branded product distribution.
The period is also likely to have been impacted positively by Pennsylvania, where adult-use growth remains a key catalyst and could have driven incremental demand. As product availability improves and in-store execution tightens, TerrAscend is likely to have witnessed healthier sequential throughput and stronger retail ticket metrics in the to-be-reported quarter. With the company focusing on efficiency and supply reliability, the Northeast states are likely to be significant drivers of the third-quarter performance.
Cost Structure and Margin Leverage
TerrAscend’s third-quarter earnings are likely to have benefited from margin improvement, driven by higher throughput following ramped-up manufacturing operations in Maryland and New Jersey. The company showed signs of margin expansion in the second quarter through better cost control and streamlined operations, and the third quarter is likely to have reflected increased production and stabilization in supply, benefiting gross margins further. Investors are likely to monitor how these operational improvements translate into a more consistent margin trend.
The third quarter is also likely to have benefited from the company’s exit from Michigan, which should help streamline the cost base and reduce financial drag. A potential improvement in product mix and retail efficiencies with overhead discipline is likely to have shown early signs of fixed-cost leverage taking hold during the third quarter. A sequential uptick in gross margin or adjusted EBITDA margin would be a strong positive signal.
Financial Outlook for Q3
TerrAscend’s third-quarter earnings are likely to reflect modest sequential revenue growth, with management guiding sales to be flat to up low single-digits compared to the second quarter. The period is also expected to have shown a slight improvement in gross margin as expanded manufacturing capabilities in Maryland and New Jersey drive better cost absorption and throughput. Operational discipline, combined with a cleaner cost base following the exit from Michigan, is likely to have supported steadier margin performance, while adjusted EBITDA margin might have held stable or trend incrementally higher.
While top-line growth may remain measured this quarter, early operational benefits and disciplined spending are likely to keep the company on a steady profitability path.
TSNDF’s Estimate Picture
For third-quarter 2025, the Zacks Consensus Estimate for revenues is pegged at $65.9 million, implying a decline of 11.1% from the prior-year quarter’s reported figure.
The consensus estimate for loss per share is pegged at 2 cents, indicating an increase of 75% from the prior-year period’s reported loss per share of 8 cents.
What Our Model Suggests About TSNDF
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP:TerrAscend has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
In the year-to-date period, TSNDF’s shares have gained 7.7%, underperforming the Medical Products Market’s 30.8% growth but outperforming the Medical Market’s 4.5% gain. TSNDF has also lagged the S&P 500 Composite’s 17.8% increase.
Year-to-Date Price Comparison
Among key peers, TSNDF shares have outperformed Green Thumb Industries Inc. (GTBIF - Free Report) but underperformed Curaleaf Holdings, Inc. (CURLF - Free Report) and Aurora Cannabis (ACB - Free Report) over the same period. CURLF has led the group with an 80.7% rise, while ACB posted solid growth of 16.4%. TSNDF shares have gained 7.7% in the year-to-date period, while GTBIF has lagged, plunging 13.7%.
Image Source: Zacks Investment Research
TerrAscend’s Key Valuation Metric
From a valuation standpoint, TSNDF’s forward 12-month price-to-sales ratio stands at 0.77X, making it the most attractively valued name among its closest cannabis peers. The stock trades at a notable discount to Curaleaf (1.42X), Green Thumb Industries (1.21X) and Aurora Cannabis (1.01X), all of which command higher premiums despite operating in similar end markets. TSNDF also sits well below the broader Medical Products Market at approximately 2.95X, reinforcing its relative value positioning.
Image Source: Zacks Investment Research
TSNDF’s Long-Term Investment Visibility
TerrAscend’s long-term investment visibility is underpinned by its sharpened strategic focus and operating footprint. With the recently announced exit from Michigan, allowing the business to concentrate on its core markets in New Jersey, Maryland, Pennsylvania, Ohio and California, the company is positioning itself to deepen its presence in states with stronger adult-use growth trajectories and better regulatory alignment. The disciplined shift should help TerrAscend drive improved margins, stronger cash-flow conversion and a more scalable cost base over time. As retail operations scale, manufacturing throughput improves and brands such as Kind Tree, Legend, Cookies and Wana gain wider distribution, TerrAscend is likely to benefit from both organic growth and improved operating leverage.
The company’s $79 million non-dilutive senior secured refinancing extended maturities into late 2028 and added an uncommitted term-loan facility of up to $35 million for future M&A. This enhanced financial flexibility is likely to give TerrAscend more scope to execute high-conviction growth initiatives without resorting to equity dilution, which investors should view positively.
On the acquisitions front, TerrAscend is likely to highlight two key deals in its third-quarter earnings call: first, the recently closed acquisition of Ratio Cannabis LLC, a dispensary in Ohio, which is expected to be immediately accretive on EBITDA and cash flow. Second, the signed agreement to acquire Union Chill Cannabis Company LLC, a New Jersey dispensary with over $11 million in annualized revenues, which will bring TerrAscend’s New Jersey footprint to four dispensaries.
The third-quarter earnings call is likely to provide commentary on integration timelines, expected revenues or margin contribution from those stores, and how these moves fit into the company’s broader growth strategy of combining organic lift in core markets with M&A-driven expansion.
At the same time, TerrAscend’s investment case gains strength from evolving U.S. regulatory tailwinds. Although cannabis remains classified as a Schedule I drug under the Federal Controlled Substances Act, recent regulatory initiatives such as the Evidence-Based Drug Policy Act of 2025 and commentary around rescheduling to Schedule III suggest meaningful reform may be on the horizon. For TerrAscend, this means potential relief from banking constraints, tax burdens and interstate growth limits, factors that could significantly boost long-term profitability. While regulatory risk remains, the shifting policy backdrop adds a strategic growth lever that could amplify returns over the coming years
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Can TerrAscend Deliver a Solid Q3 on Core Market Strength Ahead?
Key Takeaways
TerrAscend Corp. (TSNDF - Free Report) is scheduled to report third-quarter 2025 resultson Nov. 6, before the opening bell. In the last reported quarter, the company’s loss per share of 3 cents missed the Zacks Consensus Estimate by 50%.
Let us check out the factors that might have shaped TSNDF’s performance prior to the announcement.
Factors to Note Before TSNDF’s Third-Quarter Earnings Report
Core Market Momentum in the Northeast United States
TerrAscend’s third-quarter earnings are likely to be supported by continued strength in its core Northeast footprint, including New Jersey, Maryland and Pennsylvania. Management noted that retail trends have improved, distribution has broadened, and Maryland’s cultivation and manufacturing platform is now operating at a high-margin run-rate during the second-quarter earnings call. The third-quarter results are likely to reflect whether these regions can sustain the momentum from the second quarter, particularly as the company deepens consumer engagement and expands branded product distribution.
The period is also likely to have been impacted positively by Pennsylvania, where adult-use growth remains a key catalyst and could have driven incremental demand. As product availability improves and in-store execution tightens, TerrAscend is likely to have witnessed healthier sequential throughput and stronger retail ticket metrics in the to-be-reported quarter. With the company focusing on efficiency and supply reliability, the Northeast states are likely to be significant drivers of the third-quarter performance.
Cost Structure and Margin Leverage
TerrAscend’s third-quarter earnings are likely to have benefited from margin improvement, driven by higher throughput following ramped-up manufacturing operations in Maryland and New Jersey. The company showed signs of margin expansion in the second quarter through better cost control and streamlined operations, and the third quarter is likely to have reflected increased production and stabilization in supply, benefiting gross margins further. Investors are likely to monitor how these operational improvements translate into a more consistent margin trend.
The third quarter is also likely to have benefited from the company’s exit from Michigan, which should help streamline the cost base and reduce financial drag. A potential improvement in product mix and retail efficiencies with overhead discipline is likely to have shown early signs of fixed-cost leverage taking hold during the third quarter. A sequential uptick in gross margin or adjusted EBITDA margin would be a strong positive signal.
Financial Outlook for Q3
TerrAscend’s third-quarter earnings are likely to reflect modest sequential revenue growth, with management guiding sales to be flat to up low single-digits compared to the second quarter. The period is also expected to have shown a slight improvement in gross margin as expanded manufacturing capabilities in Maryland and New Jersey drive better cost absorption and throughput. Operational discipline, combined with a cleaner cost base following the exit from Michigan, is likely to have supported steadier margin performance, while adjusted EBITDA margin might have held stable or trend incrementally higher.
While top-line growth may remain measured this quarter, early operational benefits and disciplined spending are likely to keep the company on a steady profitability path.
TSNDF’s Estimate Picture
For third-quarter 2025, the Zacks Consensus Estimate for revenues is pegged at $65.9 million, implying a decline of 11.1% from the prior-year quarter’s reported figure.
The consensus estimate for loss per share is pegged at 2 cents, indicating an increase of 75% from the prior-year period’s reported loss per share of 8 cents.
What Our Model Suggests About TSNDF
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP:TerrAscend has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
TSNDF’s Share Price Performance
In the year-to-date period, TSNDF’s shares have gained 7.7%, underperforming the Medical Products Market’s 30.8% growth but outperforming the Medical Market’s 4.5% gain. TSNDF has also lagged the S&P 500 Composite’s 17.8% increase.
Year-to-Date Price Comparison
Among key peers, TSNDF shares have outperformed Green Thumb Industries Inc. (GTBIF - Free Report) but underperformed Curaleaf Holdings, Inc. (CURLF - Free Report) and Aurora Cannabis (ACB - Free Report) over the same period. CURLF has led the group with an 80.7% rise, while ACB posted solid growth of 16.4%. TSNDF shares have gained 7.7% in the year-to-date period, while GTBIF has lagged, plunging 13.7%.
Image Source: Zacks Investment Research
TerrAscend’s Key Valuation Metric
From a valuation standpoint, TSNDF’s forward 12-month price-to-sales ratio stands at 0.77X, making it the most attractively valued name among its closest cannabis peers. The stock trades at a notable discount to Curaleaf (1.42X), Green Thumb Industries (1.21X) and Aurora Cannabis (1.01X), all of which command higher premiums despite operating in similar end markets. TSNDF also sits well below the broader Medical Products Market at approximately 2.95X, reinforcing its relative value positioning.
Image Source: Zacks Investment Research
TSNDF’s Long-Term Investment Visibility
TerrAscend’s long-term investment visibility is underpinned by its sharpened strategic focus and operating footprint. With the recently announced exit from Michigan, allowing the business to concentrate on its core markets in New Jersey, Maryland, Pennsylvania, Ohio and California, the company is positioning itself to deepen its presence in states with stronger adult-use growth trajectories and better regulatory alignment. The disciplined shift should help TerrAscend drive improved margins, stronger cash-flow conversion and a more scalable cost base over time.
As retail operations scale, manufacturing throughput improves and brands such as Kind Tree, Legend, Cookies and Wana gain wider distribution, TerrAscend is likely to benefit from both organic growth and improved operating leverage.
The company’s $79 million non-dilutive senior secured refinancing extended maturities into late 2028 and added an uncommitted term-loan facility of up to $35 million for future M&A. This enhanced financial flexibility is likely to give TerrAscend more scope to execute high-conviction growth initiatives without resorting to equity dilution, which investors should view positively.
On the acquisitions front, TerrAscend is likely to highlight two key deals in its third-quarter earnings call: first, the recently closed acquisition of Ratio Cannabis LLC, a dispensary in Ohio, which is expected to be immediately accretive on EBITDA and cash flow. Second, the signed agreement to acquire Union Chill Cannabis Company LLC, a New Jersey dispensary with over $11 million in annualized revenues, which will bring TerrAscend’s New Jersey footprint to four dispensaries.
The third-quarter earnings call is likely to provide commentary on integration timelines, expected revenues or margin contribution from those stores, and how these moves fit into the company’s broader growth strategy of combining organic lift in core markets with M&A-driven expansion.
At the same time, TerrAscend’s investment case gains strength from evolving U.S. regulatory tailwinds. Although cannabis remains classified as a Schedule I drug under the Federal Controlled Substances Act, recent regulatory initiatives such as the Evidence-Based Drug Policy Act of 2025 and commentary around rescheduling to Schedule III suggest meaningful reform may be on the horizon. For TerrAscend, this means potential relief from banking constraints, tax burdens and interstate growth limits, factors that could significantly boost long-term profitability. While regulatory risk remains, the shifting policy backdrop adds a strategic growth lever that could amplify returns over the coming years