Pot stocks go through different phases of trading. What this means in that historically, most marijuana stocks will see consolidation during summer months. But after some of the anomalies we’ve seen during the latest string of earnings, is there a better way to trade pot stocks this fall?
New Age Beverages Corp (NBEV Stock Report) has always been a company that manages to divide opinions among seasoned analysts. This week the company announced its Q2 2019 financial results. In the financial results, there were elements that both camps could have pointed to and claimed victory. But eventually, it is the market that decides.
Pot Stock To Watch: New Age Beverages (NBEV)
Even though the company’s bottom line sank, investors saw this as a pot stock to buy. NBEV stock rallied following the announcement of the results. The company generated revenues of $66.3 million and that perhaps proved to be the biggest trigger for the bulls. Revenues also reflected a year-on-year rise of a staggering 397% from the prior-year period. That’s when New Age generated $13.4 million worth of revenues.
However, it is the company’s ballooning net losses, which could be a cause for concern for many marijuana stock investors. According to generally accepted accounting principles (GAAP), New Age had a net second-quarter loss of $11.7 million. It translated to a $0.15 loss per share. In the same period last year, the losses stood at $3.4 million and the loss per share was only $.09 per share.
What Are Analysts Saying About This Marijuana Stock?
Analysts had estimated a loss per share of $.03 for the period. However, the company’s cash reserves rose to $83.6 million. It had ended 2018 with $42.5 million in cash reserves.
While it is true that the revenues soared at a record rate, New Age stated that the rising expenses resulted in the sinking of its bottom line. The operating expenses in the quarter rose by an eye-popping 79.2% year on year. This was the primary reason for the losses.
On the other hand, EBITDA earnings stood at $2.2 million. The company’s Chief Executive Officer stated that the company is going to grow organically in the rest of 2019. He added that acquisitions like Brands Within Reach will continue to add value to New Age Beverages’ business.
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