The cannabis industry is fast-paced, with competition spouting from every corner. And when something like that happens, it's reasonable to assume that not every company will be a winner. With cannabis stocks having a better performance in June than in May, analysts have compiled a list of which cannabis stocks investors should avoid this month. NBEV stock is one of them, and this is why.
Should You Avoid NBEV Stock This Month?
In 2018, New Age Beverages (NASDAQ:NBEV) was the company to beat. While already selling dietary supplements beverages, New Age moved into CBD-infused beverages in September. And then a few months later, NBEV entered into an $85 million cash-and-stock deal with Morinda. With successes such as these in 2018, people thought it was a no brainer that NBEV stock would do well this year. That's not the case, though.
According to analysts at Yahoo Finance, NBEV stock has done little for investors this year, and what's worse is that these same analysts believe New Age Beverages may see even more downside. There are two reasons for this thinking. For starters, there is a lot of competition in the CBD-infused beverages division, and with more CBD products popping up, it is going to be hard for NBEV to keep the loyalty of its customers. After all, if individuals can get a better product for a more economical price, why would they stay with one brand?
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Secondly, analysts say New Age Beverages is losing money on an operating basis, despite seeing Y-O-Y Q1 sales quintuple.
It seems as if the market has already taken the advice of Yahoo Finance to avoid New Age Beverages this month. As of 2:40 PM EDT, NBEV stock is trading at $4.45; this puts NBEV stock down 0.37%.
What Can the Company Do to Improve?
Moving forward, New Age Beverages is going to want to release a new line of CBD drinks as this could increase its top line. If it doesn't, the likelihood of the company getting closer to profitability is low, as its current line of CBD beverages have gone flat, as Yahoo Finance put it. The Colorado-area company might also want to work on customer loyalty, considering more and more CBD products are popping up on the market.
What do you think? Should you avoid NBEV stock this month? Let us know your thoughts in the comments below.
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