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.
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.
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
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.
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Disclosure: We have no position in TerrAscend and have not been compensated for this article.
Forget APHA and ACB, Buy GTBIF and TCNNF
There are a lot of misconceptions going on when it comes to US legalization. Many investors are buying Aphria (APHA) and Aurora Cannabis (ACB) hoping to bank on what’s happening in the US. However, they are Canadian Licensed Producers and have no business in the US. Investors are buying them because they trade on the major exchanges, but that is the wrong move. The correct move is to buy the US multi-state operators like Green Thumb Industries (GTBIF) and Trulieve Cannabis (TCNNF).
On Election Day voters in New Jersey, Arizona, Montana and South Dakota voted to legalize recreational marijuana. South Dakota and Mississippi voters also approved measures to legalize medical marijuana.
There’s also the prospect of a more pot-friendly White House with President-elect Joe Biden. Vice Presidential Candidate Kamala Harris said at the debate a Biden administration would decriminalize marijuana at a federal level and expunge criminal records of people with marijuana-related offenses.
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves.
Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection.
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What Do Investors See In Medical Marijuana Stock (OTCMKTS:MJNA)?
Medical Marijuana Stock (OTCMKTS:MJNA) has emerged as one of many investor’s favorite pot stocks in the legal cannabis universe in 2020. The stock is already up about 10% in 2020, demonstrating how investors have warmed up to the stock early on in the New Year.
Following a disastrous 2019, cannabis investors lost money but have also learned that their best bets are stocks with strong fundamentals. They are looking for companies that have positioned themselves well in the cannabis industry and have what it takes to go for the opportunities. That is why MJNA stock is catching a lot of investor attention in 2020 because of how it has positioned itself in the cannabis market.
Robust revenue growth and strong financial position have also helped put MJNA on the radar of investors hunting for quality cannabis stocks. Revenue at MJNA more than doubled from $26.5 million in 2017 to $60 million in 2018. MJNA is also not in financial distress as may be the case with other cannabis companies out there. The company finished the third quarter, the most recent reported period, with $5.5 million in cash reserves.
Moreover, MJNA has recently taken steps to expand into new international markets and invest in companies that are leaders in their segments. These prudent actions are helping lift Medical Marijuana stock as more investors learn about them.
About Medical Marijuana stock
Is Tilray Inc (NASDAQ:TLRY) A Buy Or Sell?
For Tilray Inc (NASDAQ:TLRY) and the rest of cannabis stocks, 2019 was no doubt a bad year. But 2020 is shaping up to be a promising year for the stock. To start with, Tilray stock has already gained 8.35% year-to-date. If that says anything, it shows following the broad selloff in Tilray stock last year, we’ve got to a point where sellers are giving way to buyers in the stock.
There are several catalysts that should continue driving NASDAQ:TLRY as you’re about to see. First, below is a brief profile of the company we’re discussing.
Tilray is a Canada-headquartered global cannabis company. It is engaged in activities of cannabis cultivation and processing as well as marketing and distribution of cannabis products. Tilray already has several cannabis products brands to its portfolio. It operates across five continents through subsidiaries in Canada, Australia, Germany, and Portugal.
Following the broad collapse of cannabis stocks in 2019, investors are looking for cannabis stocks that can make a positive impact on their portfolios in 2020. Tilray stands out as an attractive cannabis stock pick in 2020. Here are some of the exciting things about the company.
Tilray CEO sees a bright future for the cannabis industry
On January 25, Tilray CEO Brendan Kennedy spoke on Bloomberg. In that interview, Kennedy framed a rosy outlook for the…