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It’s safe to say things aren’t so rosy for New Age Beverages (NBEV) stock. Shares have plummeted around 65% year-to-date in line with the trajectory of the cannabis industry in general.
The company’s latest earnings report was a mixed affair. Q3 revenue increased from $13.2 million in the same period last year to $69.8 million, though the figure came in slightly below the Street’s $69.95 million estimate. The net loss, though, of $10.7 million, or $0.14 per share was bigger than the Street’s estimate of -$0.04 per share.
The pertinent question right now is: Has NBEV stock bottomed out?
Compass Point’s Rommel Dionisio remains bullish on NBEV’s prospects. The 4-star analyst notes that a combination of an expanding distribution platform in both the traditional retail and direct-to-consumer channels, new product introductions driving organic sales growth, and successful acquisitions such as the recent Morinda transaction, have all contributed to NBEV’s status as “one of the fastest growing beverage companies in the US in recent years.”
The analyst also notes the company’s growing offerings of CBD related products as “a major near-term growth opportunity.” Dionisio concluded, “By leveraging the company's traditional retail channels in North America as well as Morinda's direct sales force in Asia, and with rapidly growing consumer acceptance around the world of the potential benefits of CBD, New Age Beverages appears well positioned to generate significant top and bottom line growth in upcoming quarters, especially once the FDA provides guidelines permitting the sale of CBD beverages and edibles.”
Fittingly, Dionisio reiterates a Buy rating on NBEV alongside a bullish price target of $9.00 which could provide enormous gains of 390% from current levles. (To watch Dionisio’s track record, click here)
On the other hand, Northland’s Mike Grondahl sounds a more cautious note, saying, “Morinda acquisition integration sounds fine, however, Morinda sales in China continue to be down significantly y/y due to government restrictions on MLM industry and this will probably take China from ~$80M in 2018 to ~ $50M in 2019 but September y/y were up 5% for first month of growth this year.” Furthermore, "NBEV noted WMT and 7-11 were performing below expectations. It sounds like while both retailers have blessed NBEV products, but getting products on the shelf has been challenging and that will remain a work-in-progress. It sounds like this is not a catalyst for NBEV."
The 5-star analyst reiterated a Market Perform rating on NBEV, alongside a price target of $3.50. Interestingly, due to the stock’s horror of a year, the target represents a substantial upside potential of about 90%. (To watch Grondahl’s track record, click here)
There is only one other analyst (from Roth Capital) currently chipping in with a view on the beverage company’s prospects, adding a further Buy rating. The consensus marks the stock as a Moderate Buy, with an average price target of $6.83, providing the risk tolerant investor massive potential gains of 272%. (See NBEV price targets and analyst ratings on TipRanks)
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