CV Sciences Inc (OTCMKTS: CVSI) is showing signs of breaking out as an impressive earnings report continues to strengthen market sentiments. Record revenues supplemented by gross margins and distribution network expansion are some of the developments that continue to influence price action activity.
CV Sciences Price Analysis
Stellar financial results come on the heels of the supplier and manufacturer of CBD products announcing distribution expansion into food drug and mass channels. With the expansion, the company has essentially strengthened its sales channels paving the way for it to enjoy sales growth.
Growing brand awareness, as well as increased demand for the Company’s CBD products, signals another record-breaking year, building on the success of 2018.
Amidst the flurry of positive developments, CV Sciences has found its price action activity limited to the $4 to $6.30 a share trading range.
However, a spike in trading volumes in the market could as well indicate renewed investor interest in the stock. Given that the stock is still bullishly supported by an underlying long-term uptrend, a spike on the upside could be in the offing.
For the stock to resume its uptrend after the consolidation spree, then it will have to rally and take out the $6.30 resistance level. Above the critical resistance level, the stock should be on its way to 52-week highs.
Conversely, failure to stabilize above the $4 support level could elicit some selling pressure that could result in the stock plunging, back to the $3 support level.
What does CV Sciences Inc Do?
CV Sciences is a life sciences company that sells consumer products containing hemp-based cannabidiol oil under the PlusCBD brand name. The company offers hemp extract products in balms as well as sprays, drops, capsules, and gummies.
Why is CV Sciences Inc a Potential Breakout Play?
CV Sciences is a potential break out play as an impressive earnings report continues to fuel, price action activity. The company is coming off an impressive first quarter depicted by sales growth as well as expansion into new markets in pursuit of opportunities for growth.
For the three months ended March 31, 2018, the life sciences company saw its revenues increase by 85%, to record highs of $14.9 million. Gross margin expanded to 70.8% from 68.9% as of last year. Sales growth could as well be attributed to a robust retail network as CV Sciences increased its retail distribution to 3, 308 stores, and a 48% year over year increase.
“We are making the investments across the organization to position ourselves to capitalize on the growing retailer and consumer demand. Our drug development program remains on track, and we continue to anticipate filing an Investigational New Drug application in late 2019 / early 2020,” explained CEO Joseph Dowling.
During the quarter CV, Sciences inked a deal that will see its CBD products made available in Food, Drug and Mass Channels as part of a new commercialization strategy. The expansion is part of an effort of capitalizing on the developments in the hemp-based CBD market. As it stands, the company remains well positioned to capitalize on both growing consumer demand and enhanced regulation.
In addition to growing the CBD product distribution network, the life science company is planning to file an investigational new drug application for its lead drug CVSI –007. The flagship product is a CBD-and-nicotine formulation designed to help individuals quit using tobacco products with ease.
The Company’s CBD products continue to elicit interest in clinical studies as researchers seek to examine the clinical benefit of CBD in the treatment of Post-Traumatic Stress Disorder.
“CV Sciences continued commitment to furthering scientific research allows us to better understand the benefits of CBD or a wide range of indications. After more than 80 years of prohibition, hemp CBD research has been severely hindered, but with the passage of the 2018 Farm Bill, we are beginning to understand the clinical benefits of CBD through scientific rigor,” stated Mr. Dowling.
What Next For CV Sciences Inc
CV Sciences is a potential break out play as underlying fundamentals continue to strengthen investor confidence. Revenue growth supplemented by gross margin expansion underscore a company in a phase of robust growth helped by improved operational efficiency.
The stock is likely to continue edging higher in continuation of the long-term uptrend as investors take note of the company’s growth metrics.
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Disclosure: We have no position in CVSI and have not been compensated for this article.