Sunniva Inc (OTCMKTS: SNNVF) is on the brink of breaking out as improving fundamentals continue to support upside action. A spike in trading volume and improved market sentiments have seen the stock race higher after a harrowing crash in 2018.
Sunniva Price Analysis
Some of the catalysts fuelling the upward momentum include a bullish outlook for 2019 as the management expects the company to report revenues of more than $70 million. The company is also fresh from securing an additional $4 million worth of purchase orders expected to strengthen the revenue base.Sunniva launching three new cannabis brands also underscores growing product pipeline crucial for generating long-term shareholder value. In the recent past, the stock’s market sentiments have inched higher on the company delivering record preliminary Q1 2019 revenues of $10.5 million.Given the string of positive developments, it does not come as a surprise that investors have continued to push the stock up. With the stock currently trading on the high end of the $3.2 to $4 trading range, a potential breakout could be on the offing. SNNVF Daily ChartA rally followed by a close above the $4 mark could trigger further rallies to the $5.60 level, in continuation of the emerging uptrend. Conversely, sell-offs followed by a close below the $3 mark could result in the acceleration of a sell-off wave, back to 52-week lows.
What Does Sunniva Do?
Sunniva bills itself as a vertically integrated medical cannabis company with operations in California and Canada. Through its subsidiaries, the company is engaged in the production of medical cannabis that it distributes through its seven Canadian clinics.
Why is Sunniva a Potential breakout Play?
Sunniva is a potential breakout play on serving a number of groundbreaking catalysts that continue to strengthen investors’ confidence in the stock. A confirmation that the company is on course to report a 169% year-over-year increase in Q1 revenue is one of the developments that continue to strengthen market sentiments.The vertically integrated cannabis play has announced preliminary revenues of $14 million for the first three months of the year. The company attributes robust revenue growth to an aggressive sales campaign in California. Gross profit for Q1 is expected in the range of between 30-35%.For the full year, Sunniva is projecting revenues of $72-78 million from, its operations in California.
Expanding Product Line
In a bid to accelerate revenue growth, Sunniva has unveiled three new cannabis products that it plans to use to target more customers in California. Sun Fire, KYNDNESS and Herbella are the latest additions poised to be part of an aggressive marketing campaign.
"We are very proud to release some of the best sun grown and indoor cannabis products that can be found in today's California marketplace. However true to our core belief that Better is Possible, Sunniva plans to unveil super premium brands with multiple product lines, which will showcase our own signature genetics, proprietary cultivation techniques crafted within our state of the art glasshouse,” said Mary Patton, VP, Marketing, Sunniva.
Sunniva has already inked strategic partnerships and exclusive procurement arrangements as it eyes the launch of highly curated cannabis brands. According to Chief Executive Officer Anthony Holler, they have put in place strategic pillars to ensure scalability and growth in California.
“With strong leadership and operating assets producing premium cannabis products, supported by our recent distribution company acquisition, we continue to demonstrate our ability to achieve significant revenue growth and secure shelf space for our Sunniva brands throughout the state,” added Mr. Holler.
Sunniva balance sheet has already received a boost on the company closing the second tranche of convertible debt financing, for gross proceeds of $3.3 million. The new financing provides additional working capital.In addition, the company remains well financed, ideal for pursuing growth opportunities in California
Bottom Line
Sunniva projecting revenues of between $72 and $75 million signals a potentially record-breaking year as the company looks to become positive cash flow. Amidst the revenue projections and Q1 stellar performance, the share price is yet to reflect the company’s tremendous potential.That said the stock likely to continue bottoming out from current lows as it is a bargain with tremendous potential.We will be updating our subscribers as soon as we know more. For the latest updates on SNNVF, sign up below!Disclosure: We have no position in SNNVF and have not been compensated for this article.
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