Shares of Marijuana Company Of America Inc (OTCMKTS:MCOA) have taken a significant hit despite the company reporting stellar third quarter financial results. Revenue in the quarter was up 2,984% as net loss from operations fell 1057%.
The underperformance in the stock market does not point to any form of operational inefficiency. For starters, the company is on course to deliver one of the strongest harvest heading into the year-end. The company is also fresh from inking a strategic partnership with ‘As Seen in TV’ as part of its new marketing campaign.
Marijuana Company Of America Price Analysis
Despite the company making impressive strides in strengthening in cannabis yield in a bid to accelerate revenue growth, the stock has continued to edge lower. The stock has since plunged to all-time lows and is currently flirting with all-time lows in the market.
Marijuana Company of America is down by more than 80% for the year. While the broader sector did come under immense pressure mid this year, most of the stocks have bounced back. However, that has not been the case for Marijuana Company of America which is struggling with immense short selling pressure.
After a breach of the critical $0.02 support level, the stock remains susceptible to further drops in continuation of the downtrend. For the stock turn bullish, it first needs to rally and stabilize above the $0.02 level, which is the immediate resistance level after the recent plunge lower. Above the $0.02 level, the stock would be back in a tight trading range of between $0.02 and $0.04.
What Does Marijuana Company of America Do?
Marijuana Company of America is a hemp-focused company that specializes in research and development of legal hemp-based consumer products. Its lead product is HempSMART that targets general health and wellbeing. The company also leases real property to businesses looking to engage in the growth and sale of cannabis.
2,984% Revenue Growth
Investor’s sentiments in Marijuana Company of America has hit all-time lows despite the company delivering solid financial results in the recent quarter. According to Chief Executive Officer, Don Steinberg, Q3 marked an important milestone as hempSMART enjoyed strong demand leading robust sales.
Revenue in the quarter came in at $90,276, representing a 2,984% increase from $2,927 reported a year earlier. In addition to robust revenue growth, the company registered a 1,057% decrease in net loss that came in at $1.9 million compared to 19 million reported a year earlier. Gross profit in the quarter surged to $61,839.
“We ended the quarter strong with a revenue trend that is now largely stabilized with the strong foundation that we built. We expect sales to continue to increase through Q4 with the holiday season and into next year with our European expansion,” said Mr. Steinberg.
According to the Chief Financial Officer, Jesus Quintero, the third quarter financial results illustrates the execution of the strategic plan. The executive expects the company to continue delivering robust revenues as well as increasing cash flow levels.
In a bid to accelerate hempSMART sales in pursuit of more revenues, Marijuana Company of America has entered into a strategic partnership with assenontv.pro (ASONTV). The partnership is for the launch of a commercial ad campaign for the company’s lead product
The upcoming ad campaign will market the company’s pet product to direct consumers through a 60 second TV advertising campaign.
“As our hemp SMART brand continues to grow, MCOA will continue to search for and utilize new partnerships that will uniquely market our incredible collection of all-natural CBD product formulations,” said Mr. Steinberg.
In addition, Marijuana Company of America has also confirmed the harvesting of high yielding CBD hemp from its 33 acres Scio Oregon project. The harvest consisted of 37,000 high yielding CBD hemp plants, producing 24,000 tons of biomass. Plans are underway to set up an extraction facility on site to process this year’s harvest.
While Marijuana Company of America has underperformed significantly in the market, the same cannot be attributed to operational inefficiency. A 2,984% revenue increase in the recent quarter is evidence that the company is doing well when it comes to revenue generation.
While the company’s revenues are quite substantial compared to big players in the industry the fact that they are growing at an impressive pace is a plus. Given the stock’s underperformance, it might be wise, to wait for it to first bounce back to the $0.02 handle to consider it a long-term investment play.
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Disclosure: We have no position in MCOA and have not been compensated for this article.