Connect with us

MJ Stocks

Why TerrAscend Corp (CNSX:TER) (OTCMKTS:TRSSF) Is A Bounce Back Play




Strong revenue growth and margin improvement are some of the groundbreaking catalysts that could help strengthen TerrAscend Corp (CNSX:TER) (OTCMKTS:TRSSF) prospects in the market. The sentiment comes at a time when the stock appears to have taken a significant hit depicted by a 60% plus slide.

TerrAscend Price Analysis

Amidst the stock underperformance, TerrAscend has continued to fire on all cylinders considering the robust revenue growth. The company has also made tremendous progress, both operationally and financially. Expansion of portfolio of assets, including the IIera Healthcare acquisition as well as the booking of the first international shipment of medical cannabis are some of the other highlights that have come to pass.

The company has also carried out a string of successful capital raises, consequently strengthening the balance sheet. That said, the company remains well-positioned to pursue strategic initiatives crucial to accelerating growth.

The stock has, however, remained under pressure amidst improvement in underlying fundamentals. In recent weeks it has shown signs of bottoming out of the $1.88 level, having emerged, it might have hit a bottom. The $1.75 level has since emerged as the short-term support level curtailing further movements on the downside.

TerrAscend needs to rally and find support above the $2 a share level to affirm it has reached the bottom and due for a correction higher. The stock finding support above the $2 a share could pave the way for it to make a run for the $3 a share level. Likewise, failure to take out the $2 resistance level could leave the stock susceptible to further drops in continuation of the long-term downtrend.

About TerrAscend

TerrAscend is engaged in the development and distribution of quality products and services to the cannabinoid industry. The company maintains operations in the medical and legal adult-use market across Canada and the U.S

Sales Growth and Margin Expansion

Even as TerrAscend continues to trade in a downtrend in the market, it continues to fire on all angles when it comes to the implementation of its core business. Solid financial results underscore a company in a phase of robust growth.

In the third quarter, the company registered a 53% increase in revenues that came in at $26.8 million. Revenue growth was mostly driven by high overall sales in Canada as well as improvements in the U.S. Pro-forma revenues in the quarter stood at $44 million.

Sales growth propelled the company to a gross profit of $7 million more than double $2.2 million reported in the second quarter. However, adjusted EBITDA shrunk to $6.5 million from $8.7 million reported in the second quarter

According to the Chief Executive Officer, Michael Nashat, TerrAscend is on its way to delivering a year of tremendous progress both operationally and financially.

“Looking ahead, we anticipate significantly higher revenue and continued improvement in Adjusted EBITDA margin in the fourth quarter, and further improvement on both fronts next year. While the current Canadian environment has presented challenges for the industry as a whole, the future is bright for TerrAscend and our ability to build long-term shareholder value,” said Mr. Nashat.

2020 Outlook

Going forward, the company intends to accelerate the completion of a New Jersey cultivation and processing facility. TerrAscend has already closed a $20 million Non-brokered private placement expected to fund the facility, which is crucial to enhancing cannabis production capacity. Part of the proceeds will also go towards working capital and other general corporate purposes

In addition, the company intends to strengthen its international operations, having already made its first international shipment to Germany. A strategic distribution agreement with iuvo Therapeutics means TerrAscend is the first and only cannabis operator, with sales in the U.S, Canada, and the EU.

Likewise, the company has entered into an exclusive distribution agreement with Syqe Medical for the launch of its flagship inhaler in the product in Canada

Bottom Line

TerrAscend anticipating improvements in adjusted EBITDA margin and higher revenues in the fourth quarter are just two of the reasons to be bullish about its long-term prospects. International expansion is another development that affirms the company’s long-term prospects as it continues to push for opportunities in Europe. That said, the recent slide might as well have presented an opportunity to take a closer look at the company, as it appears to be trading at a discount relative to its tremendous potential.

We will be updating our subscribers as soon as we know more. For the latest updates on TerrAscend, sign up below!

Disclosure: We have no position in TerrAscend and have not been compensated for this article.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

MJ Stocks

Is Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) A Good Bet Right Now?



Neptune Wellness Solutions

There is no doubt 2019 was a tough year for the hemp/cannabis businesses. However, there are a few hemp/cannabis stocks that still managed to make their investors proud. Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) is one of those stocks. Investors who put their bet on Neptune at a time like this saw their investment increase 130% by July of last year.

Neptune Wellness Solutions is already off to a strong start in 2020. The stock has gained more than 15% in the past week alone. Looking at how Neptune has positioned itself in the hemp/cannabis market, you cannot dispute 2020 is shaping up to be a great year for the stock. Then you notice that Neptune insiders are deeply invested in the stock. Insiders own more than 17% of all shares in the company. The company’s market cap of $280 million shows that insiders alone have sunk $48 million in the stock.

You are about to find out more reasons why Neptune Wellness Solutions looks to be a good pick right now. But first, here’s what you should know about the company we’re discussing.

About Neptune Wellness Solutions

Neptune Wellness Solutions has been around since 1998 and is headquartered in Laval, Canada. It is engaged in the extraction, formulation, and packaging of value-added cannabis products for both Canadian and global markets.

This is shaping up to be Neptune’s year for a number of…

Continue Reading

MJ Stocks

Is Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) A Smart Pick?



Tetra Bio-Pharma

Investors will remember that 2019 wasn’t a great year for cannabis stocks, especially Canadian stocks. Issues from uncertainty over Canada’s national elections to shortage of cannabis retail stores in Ontario greatly weighed on Canadian cannabis stocks last year. These problems are largely out of the way and investors can now spot cannabis stocks with a promising outlook in 2020. Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) is one play poised for a big breakout in 2020 as its drug products go on sale.

Tetra Bio-Pharma is one of the most promising cannabis stocks in 2020 and investors have really warmed up to the stock. At $0.50, Tetra stock has already gained more than 60% year-to-date. But that is just the beginning and we feel there is a great story to tell here. First, however, it is important for investors to understand the company we’re discussing.

About Tetra Bio-Pharma

For investors who may have just come across Tetra Bio-Pharma for the very first time, this is a Canadian cannabis company. It is focused on developing cannabis-based drugs for a variety of conditions, including cancer.

Tetra Bio-Pharma about to begin commercializing its drug products

As a drug company, Tetra Bio-Pharma is insulated from many challenges that face conventional cannabis companies. For example, companies that make adult-use cannabis products must cope with cutthroat competition in the market. Moreover, Canadian cannabis companies have Continue Reading

MJ Stocks

Why Investors Are Warming Up To Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF)



Fire & Flower Holdings

The disastrous 2019 taught investors the importance of carefully screening cannabis stocks for great picks that can withstand industrywide shocks. That explains why investors are warming up to Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF) in 2020.

Fire & Flower Holdings has positioned itself to take full advantage of the recently expanded cannabis market under Cannabis 2.0. Investors are realizing that FFLWF is one pick that can make a huge difference in their cannabis portfolio. Fire & Flower Holdings has already gained more than 25% year-to-date, a testament to the strong investor interest in the stock in 2020.

About Fire & Flower Holdings

Fire & Flower Holdings is a Canadian cannabis company. It operates as a cannabis product retail chain. It operates a network of dozens of cannabis retail outlets in Canada. FFLWF currently has licenses to operate cannabis retail stores in Alberta and Saskatchewan provinces. In addition, it runs a cannabis distributor business in Saskatchewan.

Investors will no doubt remember that 2019 was a tough year for the cannabis sector, with a widespread collapse of many cannabis stocks big and small. That shows why in 2020 investors are looking for cannabis stocks that can deliver excellent returns and make them forget the pain of the past year. FFLWF has emerged as one of the favorite cannabis stock picks for investors early on in 2020. There are several reasons behind that and here are…

Continue Reading

MJ Stocks