Organigram stock has been gaining momentum over the past month amid notable developments from Organigram Holdings (TSX:OGI) (NASDAQ:OGI).
Key Analysis
Many larger cannabis companies are struggling to make a profit. In such a situation, it might be worthwhile for investors to take a look at a small-cap company that is performing better than the likes of even Canopy Growth (TSX:WEED) (NYSE:CGC). The company in question is Organigram Holdings, a small-cap company currently with a market cap of only US$385 million.
The most important thing to mention with regards to Organigram stock is the fact that the company is expected to turn profitable this year. This is particularly important, considering the fact that Canopy is quite a bit away from making a profit.
Organigram’s earnings report last month was impressive and instigated a rally. Revenue rose by 105% to hit $25.2 million, and the net loss stood at $.006 a share. The company also spent considerably in 2019, but despite that, it had $25 million worth of cash and $55 million in credit.
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At the time of writing, Organigram stock is up by 2.60% at $2.33.
Organigram Holdings has managed to somewhat differentiate its operations from other companies by focusing more on derivative products like edibles, sprays, and powder, among others. Cannabis derivative products were legalized in Canada recently, and this line of products could prove to be a major boost for the company’s revenue this year.
Back in January, the company also announced that it signed a supply agreement with Medical Cannabis by Shoppers, an online cannabis store created by Shoppers Drug Mart. By way of this agreement, Organigram is going to supply Medical Cannabis by Shoppers with a range of products for a period of three years. The company projects a profit of $0.01 a share in the next quarter. Investors would do well to keep an eye on Organigram stock to see what happens next.
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