Record-breaking sales growth could as well be the catalyst that will reinvigorate Puration Inc (OTCMKTS: PURA) market sentiments and prospects. The company reporting 350% year-over-year growth in sales underscores underlying growth that should continue to affirm long-term prospects.
PURA Catalysts and Share Price Analysis
A confirmation that the company is increasingly outgrowing its production capacity also looks set to prop the stock’s market sentiments. The company has also confirmed plans to expand its bottling plant capacity as it moves to innovate new beverages to cater to growing market demand.
In March, Puration signed new product orders paving the way for the company to attain its $5 million revenue goal. Growing demand from notable and substantial distributors also points to what could turn out to be another record-breaking year on sales growth.
While recent developments reflect a company in a phase of robust growth, the stock price is yet to reflect the same. The stock price has been in consolidation mode after a plunge from highs of $0.20 late last year.
Puration has since resorted to trading in a tight trading range of between $0.13 and $0.07 a share. The $0.07 mark has emerged as a critical support level from where the stock has continued to bounce back on pullbacks. Above the critical technical level, the stock remains well positioned to make a run for 52-week highs of $0.25.
Conversely, a violation of the critical support level could result in the acceleration of the sell-off wave plunging the stock back to 52-week lows.
However, Puration remains well supported for further upside action given the solid underlying fundamentals that affirm the company’s growth metrics and long-term prospects.
What Does Puration Do?
Puration is a company engaged in the development, production, and distribution of water purification products. Its flagship purification systems include personal water filter bottles as well as sports bottles and collapsible water pouches. EVERx CBD Sports, is the company’s lead CBD infused beverage, that continues to account for most of the sales.
Puration is a potential breakout play after delivering record sales numbers for 2018. The financial statement indicates the company generated $1.2 million in revenue, representing a 350% year over year increase. Net profit for the full year totaled $500,000.
The company attributes revenue growth to strong demand for the EVERx CBD Sports beverage. The management is projecting another record-breaking year thanks to a strategic partnership with Kali Extracts, expected to lead to further beverage diversification.
Puration has also confirmed it is working closely with Alkane Holdings to expand its production capacity as it seeks to keep up with the growing demand. The company has also inked a strategic alliance with North American Cannabis Holdings to expand distribution channels as it seeks to accelerate sales growth and meet wholesale demand.
Increasing Production Capacity
Growing demand for the company’s flagship EVERx CBD reports Water has prompted Puration to move and increase its production capacity. Chief Executive Officer Brian Shibley has confirmed plans to acquire the company’s current bottler. The acquisition will result in the expansion of the bottler’s production capacity to address growing demand.
“As we continue to innovate new beverages, a key bottling partner or in-house capacity it’s essential. Be it an acquisition or a new build out, the plan will be finalized this month, and we will proceed quickly to expand production capacity one way or another,” explained Mr. Shibley.
In addition to pursuing acquisition to strengthen production capacity further and grow market share, Puration is slowly becoming an acquisition target for other companies. The Chief Executive has confirmed growing interest from a beverage industry player and one from a competitor. The acquisition charter could go a long way in propping the stock’s sentiments in the market.
Puration share price does not reflect the company’s tremendous potential in view of recent developments and long-term prospects. As it stands, the stock is a potential bounce-back play as underlying fundamentals, and recent developments look set to strengthen the stock’s market sentiments.
Goldman Small Cap Research cap initiating coverage of the stock with a ‘buy’ rating all but underscores Puration potential bounce back on investors taking note. The equity firm maintains a $0.25 share price target with a noted potential upside of $0.35.
Puration is an exciting cannabis play as it is currently trading at a discount with tremendous potential to edge higher.
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Disclosure: We have no position in PURA and have not been compensated for this article.