InterCure Ltd. (INCR) has shown resilience in its H1 2024 performance despite facing significant challenges, according to equity research by Pablo Zuanic of Zuanic & Associates. Despite these hurdles, the company managed to exceed revenue estimates, reporting 126 million NIS ($33.97 million) compared to the projected 121 million NIS. However, this figure remains below pre-October 2023 levels of 414 million NIS, primarily due to the ongoing disruption at its southern Israeli facility, which has been occupied by the IDF. The company is actively investing in restoring this facility and expects it to return to full operational capacity in the coming quarters.
InterCure’s H1 2024 EBITDA reached 17.6 million NIS, surpassing the 5 million NIS estimate. However, this includes government compensation for damages caused by the conflict, making direct comparisons difficult. The company ended June with 21 million NIS in cash, a significant decrease from the 111 million NIS recorded in December 2023. Additionally, Zuanic noted that net debt increased from 60 million NIS to 112 million NIS over the same period, although the company has access to an unused credit line of over 22 million NIS.
Looking ahead, InterCure is targeting double-digit sales growth in H2 2024, with anticipated revenues reaching around 140 million NIS. This figure is lower than previous estimates of 180 million NIS. The company’s expansion strategy includes launching over 30 new GMP SKUs in collaboration with brands such as Cookies, Binske and Organigram (OGI). InterCure plans to introduce Cookies products in Germany by Q4 2024, in addition to its ongoing sales in the UK.
The stock has experienced a decline from its May 2024 peak of $3.12 to $1.97. Despite the drop, Zuanic emphasizes that the company’s valuation remains attractive, with the stock trading at 1x sales and 8x EBITDA for CY25. InterCure’s enterprise value is currently estimated by Zuanic at $132 million, which includes $96 million in market capitalization and $36 million in net debt.
