The Hydropothecary Corp share price has been rising over the last year. Its stock price rose 66% in the previous six months, up 200% in the last year alone. Its stock currently trades around $3.50 per share. Analysts, however, believe the Hydropothecary share price will double in the short-term.
The company’s increasing market share in medical marijuana and expansion plans in recreational markets are adding to analysts sentiments.
Canaccord Genuity analyst Matt Bottomley issued a “Speculative Buy” rating for Hydropothecary stock – with the price target of $6.25. The analyst has raised its price target after a five-year distribution deal with the Societe des Alcools du Quebec (SAQ).
“Becoming the preferred supplier to the Quebec market out of the gate post-legalization is a source of great pride and a vote of confidence in our ability to scale operations to meet our supply commitment,” CEO Sebastien St-Louis said.
The company is looking to supply 20,000 kg cannabis to SAQ following the legalization of recreational marijuana.
Expansion Plan and Financials Numbers
The company’s expansion plans and financial numbers are providing massive confidence in its future fundamentals. Its revenue grew 29% in the first quarter of this year, while medical cannabis sales jump 45% over the prior year period. The company expects to generate high double-digit revenue growth this year.
Canaccord Genuity analyst expects its revenue to stand around $17.0-million in fiscal 2018 and $139.0-million in the following year.
The Hydropothecary Corp is currently working on two major expansion plans to capitalize on increasing demand. The first expansion program, which includes a new 250,000 sq ft greenhouse, is likely to complete by mid of this year. The second growth plan will complete by the end of this year. Both expansion plans will increase its production potential to 108,000 kg of dried cannabis.
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