KSHB stock continued to gain momentum this week and soared on Wednesday after an analyst at Jefferies started coverage on KushCo Holdings (OTCQB:KSHB) with a Buy rating.
Analyst Sets Aggressive Price Target
The cannabis sector has been in all sorts of trouble over the course of the past six months or so, and the trend has continued until now. However, some companies are bouncing back slowly, and one of those is KushCo Holdings.
On Wednesday, KSHB stock rose by as much as 12% after it emerged that Jefferies analyst Owen Bennett had initiated positive coverage on the stock. The analyst stated that at this point in time, KushCo has one of the cheapest valuations in the cannabis space and set a target price of $3.50. The target price is more than 100% what the stock price was on Tuesday close.
While it is true that KSHB stock moved significantly on the back of this news, it should be noted that KushCo stock has gained as much as 40% over the course of the past five weeks—so, momentum is building.
Earlier on in November, KushCo Holdings reported its financial results for the fourth fiscal quarter. The losses widened to $11.3 million (13 cents a share) from $3.2 million (4 cents a share) in the prior-year period. However, the company’s revenue of $47 million in the quarter managed to beat analysts’ estimates of $45.8 million. Moreover, it reflected significant growth from the year-ago period, when its revenue stood at $20 million.
However, the most important takeaway from the earnings was the company’s projection that its 2020 full revenue is going to be in the $230 million to $250 million range.
Hemp Trading Operation
Another important development is that KushCo is going to enter the hemp industry with a hemp trading arm.
The company stated that the business is going to serve only licensed buyers and will be in line with all the existing laws. Plus, KushCo is going to partner with a leading US industrial farmer for its hemp supplies.
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