Elev8 Brands Inc (OTCMKTS: VATE) fundamentals are still strong despite a recent price slump. Robust revenue growth supplemented by an expanding distribution network are some of the developments that affirm growth in the core business. Expansion into new markets has also come into play as the company continues to strengthen its sales channel in pursuit of revenues in the cannabis industry.
Elev8 Brands Price Analysis
Amidst the flurry of positive developments, Elev8 stock has continued to edge lower in unclear circumstance. Since peaking in May, the stock has lost more than 60% in market value. The sell-off has coincided with growing concerns about the health of the global economy and amidst soaring trade tensions between the U.S and China.
The stock finds itself languishing at the $0.02 support level above which it remains well supported for a potential bounce back. A rally followed by a close above the $0.03 level could fuel a rebound back from current lows, which could see Elev8 making a run for the $0.05 resistance level.
About Elev8 Brands
Elev8 is a company engaged in the development and commercialization of cannabis products geared towards fitness and wellness markets. Its product line is made up of hemp-based food as well as beverage and healthcare products. It also develops CBD Tinctures, CBD E-juice, and CBD Lotion.
The announcement of impressive second-quarter financial results is one of the developments that support a potential bounce back from current lows in the market. In a press release, the company notes that its second-quarter earnings exceeded first-quarter earnings by 25%. The company also registered the first month of profit in June helped by robust sales growth.
In July, the company reported a 93% increase in brick and mortar sales with its hemp coffee and tea product line. Sales growth is only expected to continue, as Elev8 is dealing with strong demand for its CBD products. The company is currently processing small production run of its CBD-infused Ready to drink coffees and teas, to meet the growing demand.
Elev8 has also moved to strengthen its cannabis product line with the unveiling of two new flavors for its beverages. The new CBD beverages should more than triple the company’s revenues. The unveiling of a new product line comes hot on the heels of new ready to drink beverages generating over $64,000 in revenue in under 45 days after launch.
Expanding Distribution Network
In addition, the company has signed a string of distribution agreement as it seeks to reach a broader target market in pursuit of sales. In the recent past, the company has signed deals with BS Distribution that expands its footprint in the greater California in areas such as Sonoma, Napa, and Mendocino.
Similarly, the company has inked a distribution agreement with Sunshine State Distributing set to enhance the distribution of its products in Florida.
“This is a great addition for Elev8 Hemp. Sunshine State has the ability to help us expand quickly as they have a strong, established network here in Central Florida. We have an additional distributor here in FL that we connected with Sunshine State to order directly through them,” said Ryan Medico, CEO of Elev8 Hemp, Inc.
Elev8 has seen its distribution network expand to 18 distributing partners, all set to make its CBD products available to more retailers as well as customers’ homes. Deals with more distribution partners are in the pipeline as the company seeks to generate maximum value from its CBD product line.
“Our plan is on schedule, and we will far surpass our goal of distributors this year. We have sold through our first production run of our ready to drink CBD beverages rather quickly ending June with the Company’s first profitable month,” explained Mr. Medico.
Amidst a slump in share price, Elev8 continues to fire on all cylinders when it comes to operational efficiency. Revenue growth at the back of a rapid expansion into more cannabis market signals the company’s push for value in the multi-billion-dollar business.
While the stock has taken a significant hit since the start of the second half of the year, it remains a fundamentally attractive investment based on recent sales growth. Overall, we see the current selloff as a discount entry opportunity.
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Disclosure: We have no position in VATE and have not been compensated for this article.