Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) has been on fire having risen by more than 40% since the start of the year. The stock has continued to edge higher on growing optimism that 2019 will be a break out year for the company.
The stock already commands a buy rating in the market, as analysts remain buoyed by robust revenue growth prospects as well as positive market sentiments.
Share Price Analysis
Analysts expect the company to deliver record revenues for its Q4 at $24.5 million compared to $17.7 million reported a year ago. In addition, the stock’s sentiments have inched higher, having emerged full-year revenue is on course to more than double.
Expectations for robust revenue growth comes on the company’s cannabis harvest increasing ten times in 2018. As it stands, Charlotte Web Holdings is on course to meet growing CBD product demand.
The stock has since taken off as investors continue to react to revenue growth expectations as well as the buy rating that the stock commands in the market. As it stands, the stock is flirting with a critical resistance level at $17 a share.
A violation of the critical resistance level should open the door for the stock to continue climbing the ladder, in line with the bullish momentum. Failure to breach the critical resistance could see the stock edging lower, back to the tight trading range of between $17 and $13.50.
Short sellers must content with the $13.50 support level. A breach of the critical support level could open the door for the stock to edge lower. However, as it stands Charlotte Web Holdings remains well positioned to continue climbing the ladder given the strength of the upward momentum.
Investor’s sentiments in the stock have inched higher in recent weeks, a development that supports further upside action.
About Charlotte’s Web Holdings
Charlotte Web Holdings bills itself as a market leader in the production and distribution of hemp-based cannabidiol wellness products. It boasts of a robust pipeline of products in the categories of tinctures, capsules and topical products.
Why is Charlotte’s Web Holdings Exploding?
Shares of Charlotte Web Holdings are exploding in response to analysts at Cormark Securities initiating coverage of the stock with a ‘buy’ rating. As it stands, four equity firms have a buy rating on the stock an indication of further upside action, even though the stock is flirting with a key resistance level. The firm has a share price target of CA$25.50 on the stock, which points to a 20% plus potential upside
The bullish rating comes on growing optimism about the company’s ability to register robust revenue growth in 2019. Consensus estimates point to a 100% increase in revenues to $151 million, compared to $70.1 million generated in 2018. Analysts also expect EBITDA to more than double to $55.8 million compared to $23.5 million as of last year. The stock is currently trading with a price to earnings multiple of 113x.
Expectations are also high on the company registering yet another record-breaking year on starting the year on a roll. The company says its inventory levels are at record highs sufficient for meeting the growing CBD demand, Charlotte Web Holdings harvest for 2018 increased 10X, a development that makes it easy for the company to produce quality CBD products as a way of making good use of the soaring demand.
The company has already started processing the high quality 100% the U.S grown hemp with proprietary extraction methods, to be used in the company’s products.
“Charlotte’s Web is one of only a few hemp CBD producers capable of supplying large volumes of high-quality hemp extracts, from its own supply chain that can meet significantly increasing market demand. As the category and brand leader, our goal is to increase our market share, and with this bountiful harvest we are able to satisfy our customer demands for 2019 and beyond,” said Hess Moallem, President and CEO of Charlotte’s Web.
What Next For Charlotte’s Web Holdings
Charlotte’s Web Holdings is without a doubt a top pick for investors eyeing opportunities in the cannabis sector. The fact that the stock commands a buy rating attest to growing market sentiments about its long-term prospects. Given that the stock is currently trading near record highs, pullbacks should provide exciting entry positions.
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Disclosure: We have no position in CWBHF and have not been compensated for this article.