Is Charlotte’s Web Stock a Good Bounce Back Play?

Charlotte's Web stock

Charlotte's Web stock is trading near all-time lows after underperforming over the past year. Charlotte's Web Holdings (TSX:CWEB) (OTCQX:CWBHF) is already down by more than 20% this year, having lost more than 30% in market value in 2019.

The poor show stems from disappointing financial results and investor concerns about Canada’s retail environment. Amidst the underperformance, Charlotte’s Web appears to be trading at a notable discount relative to its long-term prospects.

Robust Product Portfolio

As one of the big players in Canada’s Cannabis landscape, Charlotte Web Holdings remains well-positioned to bounce back after a poor show the past one year. With the country’s CBD market poised to expand with the legalization of cannabis edibles, is now a good time to watch the company’s growth metrics?

Charlotte’s Web Holdings boasts of one of the most diverse portfolios of cannabis products, made up of gummies capsules and other things. The diversified product portfolio presents a unique opportunity for the company as it continues to build its retail presence, which is wider than that of other players in the industry.

Charlotte's Web stock is now trading lower by 3.34% to $5.50.

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Production Capacity Expansion

Charlotte Web Holdings has expanded its footprint and made its products available in more than 10,000 stores across the United States.  The company continues to affirm its industry-leading retail presence as part of an effort to diversify its revenue streams.

In addition to strengthening its retail presence, the cannabis player continues to ramp up production capacity. In 2019, the company increased its hemp cultivation area by 187% to 862 acres.

The building of a 137,000 square foot production facility in Colorado should more than double the company’s production capabilities, allowing it to enjoy economies of scale in the years to come. Management expects the new facility to enhance operational efficiency levels, in addition to cutting back on costs, which should have a positive effect on the bottom line.

Charlotte Web Holdings is an exciting long-term potential trading at a discount relative to its growth metrics and underlying fundamentals. What do you think about Charlotte's Web stock?

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