Kona Gold Solutions Inc (OTCMKTS: KGKG) bounce back is gaining momentum. After plunging from 52-week highs, the stock is once again edging higher supported by improving fundamentals. One of the catalysts fuelling the stock’s upward momentum is the signing of a distribution agreement with Imperial Beverage. In addition, the company has inked a strategic partnership with the American Breast Cancer Foundation.
Kona Gold Price Analysis
An impressive second-quarter earnings reports has all but continued to affirm growth in the company’s core business. The result has been a spike in trading volume, underscoring renewed investor interest in the market. The stock has since bounced off the $0.09 mark, rallying by more than 20% in the process.
The rally has come at a time when the broader stock market is trading lower amidst growing concerns over a looming global recession. Given the strength of the upward momentum, Kona Gold is set to make a run for 52-week high $0.15, which happens to be the immediate resistance level.
A surge-followed by a close above the $0.15 level should open the door for the stock to register new higher high in continuation of the long-term uptrend that began late last year. Conversely, failure to rally past the critical resistance level could leave the stock susceptible to trading in between $.10 and $.15 a share.
What Does Kona Gold Do?
Kona Gold, through its subsidiaries, is a company focused on the development of hemp-infused energy drinks. The company is also engaged in the production of hemp shampoo as well as energy patches.
Robust Sales Growth
Kona Gold is showing signs of edging higher on investors reacting to an impressive second-quarter earnings report that affirm growth metrics. In the quarter, the company beat its revenue projections of between $400,000 and $329,000 on delivering $729,000 in sales.
The company attributes the sales growth to the signing of 16 new distribution partners. The launch of two new Kona Gold Energy Drink Flavors allowed the company to reach a broader target market, thus pushing revenues to new heights.
Sales growth looks set to be the order heading into year-end. The company has already signed distribution agreements with 14 new partners. The deals should allow the company to target a broader market and in return, generate more sales. The company has also set sights on expanding its footprint into more states in a bid to strengthen the current sales channels.
“Our team continues to fire on all cylinders, and our products are making a huge impact in the market place. Our premium beverage products are now available in 35 states in convenient stores, restaurants, grocery chains, specialty stores, bowling alleys, smoke shops, and more,” stated Robert Clark, CEO of Kona Gold Solutions, Inc.
A distribution agreement with Imperial Beverage sets the stage for Kong Gold to target customers looking for hemp energy drinks in Michigan. Initially, the company did not have any distribution in the state. The agreement brings to 36 the total number of states where Kona Gold products are currently available. It also brings to 69 the total number of distribution partners distributing the company’s products.
The inking of a strategic partnership with the American Breast Cancer Foundation paves the way for Kona Gold to start producing a new hemp energy, drink flavor. The new product should be available for sale starting in September. A portion of its sales will go towards supporting the American Breast Cancer Foundation.
“We are thrilled to be joining the battle against breast cancer with the addition of our new Limited-Edition Pink Grapefruit flavor. By partnering with the ABCF, we have been granted the opportunity to help increase awareness and assist financially through this special partnership,” stated Chris Selinger, V.P. of Sales of Kona Gold Solutions, Inc.
Kong Gold has recovered after a steep pullback from 52-week highs. The stock looks set to continue its solid performance as robust sales growth continues to excite investors. The recent earnings report provides clear evidence of a company shrugging off concerns of global recessions.
The signing of distribution agreements have strengthened the company’s ability to ramp up sales growth. That said the stock looks set to continue climbing the ladder as investors take note of the revenue growth rate.
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Disclosure: We have no position in KGKG and have not been compensated for this article.