Should You Buy, Hold or Sell VRNO Stock Post Q3 Earnings Release?

Last week, Verano Holdings Corporation VRNO reported its third-quarter 2025 results. While earnings missed our estimates, sales met the mark.

The U.S.-based cannabis operator posted a wider-than-expected loss of 12 cents, in line with the year-ago quarter. Sales declined 6% year over year to about $203 million, primarily reflecting price compression and intensified competition across key markets.

However, long-term investors typically focus beyond a single quarter’s numbers and assess broader fundamentals. Let’s explore the company’s fundamentals to better understand how to play the stock after its latest results.

Domestic Headwinds Deter Verano’s Sales Growth

Despite being regarded as one of the largest cannabis operators in terms of geographic scope, Verano faces revenue pressure from a challenged domestic environment. As the company derives all of its revenues from the U.S. market, persistent price compression, competitive intensity and uneven regulatory progress have weighed on top-line performance.

During the third quarter, retail sales were essentially flat year over year at $164 million, reflecting seasonal softness in Florida and Arizona as well as heightened pricing competition in Illinois and New Jersey. Meanwhile, wholesale revenues declined 9% year over year to $82 million, as broader industry pricing pressures continued to affect sell-through and inventory dynamics across key markets.

Margin performance also reflected these market conditions. Gross margin contracted approximately 300 basis points to 47%, driven by promotional activity and retail price adjustments. However, Verano’s disciplined focus on operating efficiency supported cost performance. Selling, general, and administrative (SG&A) expenses declined 13% year over year to $80.6 million, underscoring ongoing optimization efforts even amid store expansion and product launches.

Despite the headwinds, Verano maintained an optimistic tone for Q4 and beyond. This was backed by the company’s continued emphasis on operational efficiencies, retail expansion and product innovation (including a new vape system) as foundational to longer-term momentum. As part of its long-term positioning, Verano recently completed its redomicile from British Columbia to Nevada, aligning its corporate structure with its U.S.-based operations. It believes that this move will enhance its acceptance in U.S. capital markets and also improve the marketability of its shares.

Cutthroat Competition in the Cannabis Space

Verano competes in an overcrowded market, against the likes of Canopy Growth CGC, Green Thumb Industries GTBIF and Tilray Brands TLRY, which are also pursuing similar expansion and cost-cutting strategies.

Companies like Canopy and Tilray are also expanding their footprints beyond geographic borders, in markets like Europe and Australia. This international exposure gives them an edge over Verano and Green Thumb, which remain fully dependent on an increasingly saturated and fragmented U.S. market.

VRNO Stock Performance and Estimates

Shares of Verano have underperformed the industry this year so far, as shown in the chart below.

Loss estimates for 2025 and 2026 have widened over the past 30 days.

How to Play VRNO Stock?

Although Verano’s efforts to streamline its cost base and dispensary growth are beginning to reflect in its fundamentals, domestic pricing pressure and stiff competition remain near-term challenges. President Trump’s recent comments on marijuana rescheduling have reignited optimism in the cannabis sector, but investors may prefer to wait for clearer signs before initiating or expanding positions.

VRNO currently has a Zacks Rank #4 (Sell), which suggests that the stock looks vulnerable to volatility and may carry elevated risk for conservative investors.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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