Terra Tech Corp (OTCMKTS: TRTC) has retraced lower ever since it clocked 2019 highs at the end of the first quarter. The stock has crumbled under soaring bearish pressure. Amidst the steep pullback, the stock is a potential bounce-back play as it is currently trading at the lower end of a tight trading range.
Terra Tech Price Analysis
A plunge to the lower end of the $0.63 to $1 trading range leaves the stock in a precarious position. A plunge lower could elicit further selling pressure while a bounce back could result in the stock making run for this year highs.
In our view, the stock could bounce back on investors reacting to a string of positive developments that affirm the Company’s prospects. For starters, Terra Tech is fresh from launching a legal cannabis delivery services as it continues to pursue growth opportunities in California.
The Company is also fresh from delivering impressive financial results that indicate gross margin expansion as net loss from operations continues to narrow. The sale of Blum Desert is another development poised to strengthen the company’s financial position.
Terra Tech commencing cannabis sales to the adult use market should continue to excite investor’s, ideal for fuelling an upswing in the stock’s price action activity. With the stock appearing to have hit the floor after the recent pullback, a correction higher could be in the offing at the lower end of the trading range.
A rally followed by a close above the $0.80 mark should reaffirm Terra Tech breakout credentials from current lows. The stock needs to rise and find support above the $0.80 mark to have a chance of rallying back to this year highs.
What Does Terra Tech Corp Do
Terra Tech is a vertically integrated cannabis-focused company that operates in three segments; Herbs and produce products, Cannabis dispensary & cultivation and real estate and construction. The company operates medical marijuana retail and adult use dispensaries under the Blum brand.
Delivery Services Launch
Terra Tech tanking to old levels does paint an accurate picture of what lies ahead in view of recent developments. The pursuit of opportunities for growth all in the effort of growing shareholder value is heating up as the Company continues to make strategic moves.
The launch of a legal cannabis delivery service sets the stage for Terra Tech to be a key player in the burgeoning California cannabis marketplace. Through the Blum Ana dispensary, the firm is to become a major supplier of medical and adult use cannabis as it continues to diversify its streams of revenues.
The new delivery system should allow Terra Tech to expand distribution of best-in-class cannabis products and in the process, generate significant revenues. The Company has already purchased multiple delivery vans that it is to use for the delivery business.
Margin Expansion Narrowing net Loss
The unveiling of the delivery system comes on the heels of Terra Tech seeing its first-quarter revenues take a hit to $7.4 million, compared to $8.6 million generated in the first quarter of last year. The decline was because of an increase in the number of taxes that the state of California placed on cannabis sales.
Gross margin, on the other hand, expanded to 54.4% from 36.2% a year earlier. Margin expansion underscores operational improvements across cannabis segment, herbs, and product segment. Net loss in the quarter narrowed to -$5.1 million or $0.05 a share, compared to a loss of -$12.2 million reported a year earlier.
Blum Desert Inn Sale
Buoyed by Q1 performance, Terra Tech has embarked on a restructuring drive geared towards building value for shareholders. The Company has since agreed to the sale of its Desert Inn Road retail dispensary for $10 million. The sale is part of a restructuring strategy that should allow the company to leverage its balance sheet to fuel growth.
“We plan to redeploy the additional capital generated by this sale toward more productive assets in California. These additional funds make us well positioned to build on our strong momentum through increased investments in infrastructure and sales and marketing,” explained CEO Derek Peterson.
Terra Tech is in the best shape it can be when it comes to operational efficiency. Narrowing net loss and widening gross margin underscores the Company’s growth strategy in the burgeoning cannabis sector. The sale of Blum Desert Inn is another development that should strengthen the Company’s balance sheet ideal for pursuing growth initiatives.
The stock taking a hit presents an opportunity to buy the stock at a discount given the Company’s tremendous long-term potential.
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Disclosure: We have no position in TRTC and have not been compensated for this article.
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Namaste Technologies Price Analysis
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Cannex Price Analysis
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The ongoing pullback has since exposed the stock to a crucial support at the $1 a share level. A breach of the support level would leave the stock susceptible to further drops probably back to the $0.80 mark, a critical technical level.
For the stock to resume its uptrend, it first needs to rise and stabilize above the $1.20 mark, the immediate resistance level. The stock rallying and finding support above the $1.2 mark would open the door for bulls to fuel a rally back to 52-week highs.
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CNPOF Share Price Analysis
In January 31 2019, Canopy Rivers’ stock attained the highest price year-to-date at $4.43 after a strong start to the year. At the time, the stock had established support at $2.85. However, the stock crossed the 50-day moving average in March sloping downwards in what looks like minor correction. In the last two months, the stock has traded quite close to the MA (50) trend-line and a little jump should bring in the bulls for a massive rally.
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