CV Sciences Inc (OTCMKTS:CVSI) is a potential break out play on the company touting a bullish outlook for 2019. The stock has in recent months, struggled to power through a tight trading range. However, the announcement that the company had a record-breaking 2018 and still poised for robust growth in 2019 could trigger upside action.
CVSI Share Price Analysis
The stock has been trading in an uptrend for the better part of the past year. However, upon hitting record highs of $9.20, the stock came down tumbling before resorting to trading in a range. Confirmation that the company generated a 133% increase in revenues in 2018 could reinvigorate investor’s interest in the stock.
The company appears to be firing on all cylinders when it comes to operational efficiency, having benefited from a robust expansion drive. For starters, the company’s retail distribution network increased 45% last year, allowing the company to register robust revenue growth.
While the stock is currently trading at the $4.72 a share level, it faces immediate resistance at the $5.60 a share level. A breach of the resistance level should open the door for the stock to make a run for 52-week highs.
On the downside, short sellers will have to contend with $4.20 mark, seen as the immediate support level ahead of the $3.50 mark, the next support level. A close below the $3.50 would reaffirm an emerging downtrend, setting the stage for the stock to edge lower.
About CV Sciences
CV Sciences casts itself as a life sciences company operating under two segments of specialty pharmaceuticals and consumer products. In the recent past, the company has expanded its footprint to develop prescription drugs, utilizing synthetic Cannabidiol CBD as an active pharmaceutical ingredient.
Robust Revenue Growth
CV Sciences upside action could receive a boost on the company reporting record revenues of $48.2 million for FY2018, representing a 133% increase from 2017 levels. Improved operating margins saw the company deliver a record net income of $10 million or $0.09 on fully diluted shares.
The company also achieved significant milestones in 2018 that sets it on course for robust growth in 2019. For starters, the company’s retail distribution network increased to 2,238 stores, representing a 45% increase. The company also generated $12.6 million in cash from its operations, leading to a cash balance of $12.7 million as of the end of the year.
“We finished 2018 with strong sales momentum and enter 2019 well positioned to capitalize on the rapidly growing consumer awareness and broad-based demand for hemp CBD products. We are positioning our company to capitalize on this incremental growth opportunity with enhancements to our leadership team and business systems, and are in the planning process for expanded production and fulfillment capabilities to support rising demand,” said CEO, Joseph Dowling.
In addition to sales growth, CV Sciences has also achieved significant progress in its drug development program, for lead candidate drug CVSI-007. The company is planning to file an Investigational New Drug Application in the course of the year.
The company also remains focused on pursuing opportunities for growth in the Multibillion-cannabis industry. With the expansion, the company intends to leverage its rapidly growing and profitable consumer product and drug development division. With the expansion of the company, us eyeing piece of the $16 billion year CBD sales cannabis market.
Amidst the underlying growth, CV Sciences has made a significant enhancement to its management team as it seeks to leverage the experience of some of the best talent. Conversely, the company has confirmed the appointment of Dr. Douglas Mackay as the Senior Vice President in charge of Scientific and regulatory affairs.
Mackay will spearhead the company’s efforts on the development of hemp-based cannabidiol products.
“CV Sciences is dedicated to accelerating CBD innovation and imperative to that commitment is our ability to attract the world’s best talent. Employing people with the caliber of Dr. MacKay allows CV Sciences to not only strengthen our position as a provider of high-quality CBD products but also improves the knowledge base,” said Mr., Dowling.
Nothing stands in the way of CV Sciences registering yet another record-breaking year after a stellar performance in 2018. Expansion into the CBD space is a development set to diversify the company’s operations, setting the stage for it to strengthen its revenue base.
The company has turned in positive cash flow and underscores what investors can expect 2019 as it continues to grow at an impressive rate. After a long period of consolidation, the stock looks set to resume its upside action.
We will be updating our subscribers as soon as we know more. For the latest updates on CVSI, sign up below!
Disclosure: We have no position in CVSI and have not been compensated for this article.