Charlotte's Web stock has been outperforming this year, thanks to multiple positive developments from Charlotte's Web Holdings (TSX:CWEB) (OTCQX:CWBHF).
The marijuana sector may have had its own share of hiccups over the course of the past few months, but one cannabis stock that has continued to grow at an impressive pace is Charlotte’s Web Holdings.
Key Drivers
The reason for Charlotte's Web stock's impressive growth is the fact that the company is mainly involved in the hemp-based CBD space, and in that particular segment, it is a market leader. Despite the emergence of competition in that industry, Charlotte’s Web Holdings has continued to grow and generate profits. It is valued at $1 billion already and considering its impressive growth, it is time to have a closer look at the company.
In Q2 2019, Charlotte's Web reported sales of $25 million, which reflected a year-on-year rise of 45%. On the other hand, the gross margins grew impressively and hit $18.8 million, to reflect a rise of 75%. The earnings per share for the period stood at $0.20. The company has projected that sales for the full year will be in the range of $120–$170 million and EBITDA for the same will be between 30% and 35%.
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Charlotte's Web stock is trading higher by 0.40% at $21.45 at the time of writing.
Charlotte’s Web management is highly optimistic with regards to the company’s sales growth. The retail locations made up as much as 51% of the total sales, and the company is working hard to raise the number of locations carrying its products quickly. It has been successful so far, having increased those numbers to 7,871 locations in Q2 2019 from only 1,926 in 2018. That is a significant rise and something that should result in a further rise in sales in the coming quarters. The addition of CVS (NYSE:CVS) and retail giant Kroger (NYSE:KR) as retail partners should also prove to be a huge boost in the coming quarters.
Moreover, the company is also looking to diversify into the health niche and is looking to develop products meant for sleep as well as for stress relief. Charlotte's Web Holdings is also raising its production capabilities considerably, and considering its valuation as opposed to its rivals, it could prove to be an inspired investment.
Charlotte's Web stock has soared 50% over the past three months.
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