Glass House Brands Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 4✗ 24▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / Book Value per Share1.4x

  ✗Dreman< 1.2x✓Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio1.4x

  ✓Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-9.8%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-9.8%, ROC=-6.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)9.1x

  ✗Dreman< 8x

  Valuation ReasonablenessOE Yield=-40.2%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-13.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=1.4x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low100% of trailing low ($1.27)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-24.78%; #4692/6340 (top 74.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.6177; #2469/6449 (top 38.3%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share1.67x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-27.0%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+1.5205; #1318/5247 (top 25.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-13.14%; #3336/4519 (top 73.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-88.55%; #5964/6202 (top 96.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts0% pass✗ 15▾

  Split decision: 14 FAIL · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (0/7)✗GreenblattRank #2110✗PiotroskiFAIL (F-Score 3)✗DremanFAIL (1/11)✗MungerFAIL (0/4)✗PabraiFAIL (1/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (3/9)•TempletonNEUTRAL (5/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #2180/2370 (Top 92.0%))✗NeffFAIL (1/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Cash Flow10% pass✓ 2✗ 10▾

  9 of 10 flag GLAS's cash flow — Buffett, Lynch, Dreman +6 more

  Free Cash Flow Proxy$-41.8M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-15.7M

  ✗LynchPositive and growing

  Operating Cash Flow$11.4M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=3.59%, ROA=-9.31%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)9.1x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-13.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive2/6 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-15.1%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency3/6 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-15.7M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-13.14%; #3336/4519 (top 73.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability13% pass✓ 5✗ 30▾

  14 of 16 flag GLAS's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)0/7 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/7 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-38.5%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-9.1% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-41.8M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-40.1%

  ✗Lynch> 15%

  EBIT / Enterprise Value-9.8%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-9.8%, ROC=-6.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-9.31%

  ✗PiotroskiROA > 0

  ROA Change YoY0.17% -> -9.31% (delta: -9.48%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=3.59%, ROA=-9.31%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY48.5% -> 42.3%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-9.4%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-40.1%

  ✗Dreman> 12%

  Margin of SafetyP/B=1.4x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-49.7% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-9.1%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-40.1%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-30.8% (2023) -> -9.1% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 50.3% -> 42.3%, operating margin -30.8% -> -9.1%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-24.78%; #4692/6340 (top 74.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+24.16%; #1782/3702 (top 48.1%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-40.11%; #4085/5226 (top 78.2%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1075; #3567/5884 (top 60.6%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years0/6 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag GLAS's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 84.0% vs Rev: -9.4%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth24.9%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 50.3% -> 42.3%, operating margin -30.8% -> -9.1%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR30.4%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag GLAS's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio1.78

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-15.1%

  ✗Buffett> 10%

  ROIC - WACC-25.1%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-6.9%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.99 -> 1.78

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.65x -> 0.57x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.78

  ✓Dreman> 1.5

  Return on Invested Capital-9.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-25.4%; FY2024: ROIC=2.6%; FY2025: ROIC=-9.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -9.2%)

  ✗SleepROIC > 12% in a majority of years
• Debt & Leverage25% pass✓ 5✗ 10▾

  9 of 12 flag GLAS's debt & leverage — Graham, Buffett, Lynch +6 more

  Total Debt / Shareholders' Equity0.93

  ✗Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  LT Debt vs Net Current AssetsLT Debt $68.6M vs NCA $29.8M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.93, IC: -3.7x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.93

  ✗Lynch< 0.33

  Cash - Long-term Debt$-48.8M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change16.28% -> 21.54%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.78

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Debt Levels0.93

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-3.7x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.93

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.9287; #3141/4210 (top 74.6%)

  ✗AsnessTop 30% of eligible cross-section