Namaste stock has been correcting since the beginning of this month as the broader cannabis sector has been showing signs of exhaustion.
Let’s analyze the recent development of Namaste Technologies (TSXV:N) (OTCQB:NXTTF) to find out what’s going on.
Namaste Technologies is in a line of business that should ideally make it a successful company. After all, an e-commerce platform meant solely for selling a range of cannabis accessories is appealing, especially as the cannabis industry is currently growing at a healthy rate. However, that has not come to pass, and much of the reason behind the poor performance is due to the company’s own actions. Namaste Technologies has had a tough time over the past months as Namaste stock nosedived, losing an auditor, firing employees, and being the center of scandal.
Currently, the company is trying to earn back the trust of the market, but so far, it has been a bit of a struggle for Namaste. It is almost always tough to make a quick turnaround from the sort of setbacks that the company has experienced.
NXTTF stock is trading lower by 0.50% at $0.47 on the OTC market. On the Canadian side, Namaste stock is down 1.60% and now selling at $0.62.
Tough to Make a Quick Turnaround
On top of that, investors are still in the dark about the company’s performance on the financial front since Q4 2018, and that is definitely a handicap for Namaste, as it tries to engineer a turnaround. In the last earnings reported by the company, it generated revenues of $3.9 million, which reflected neither a major decline nor any growth either year-on-year. Additionally, the vaporizer business growth remained absolutely static.
Although Namaste Technologies managed to generate a gross profit of $930,000, it eventually ended up as an $8.7 million loss once the operating expenses were factored in. Now, it is quite clear that on the surface level, this looks like a poor performance, but one needs to go a bit deeper into the company’s operations in order to see whether it really is so. The poor performance in the vaporizer business is attributed to Namaste’s decision to divest from its interests in the United States.
Its CannMart brand generated $32,000 in sales, but the brand had only been on the market towards the end of the quarter and hence, if it continues to sell well, then it could be a major boost for the company in the next quarters. Namaste is in an exciting business, and management needs to win back the trust of the investors for the stock to grow again.
Namaste stock has fallen 30% since the beginning of June. Moreover, the stock is down almost 65% from its January peak price of $1.30.
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