The recent massive breakout in CV Sciences Inc (OTCMKTS:CVSI) certainly deserves a closer look. The stock took flight this week, logging new 3-year highs. That’s the stock’s highest levels since the start of what we might call the second major cannabis stock wave, which has roots in late 2016. To add to the fervor, the company just announced its financial results for the first quarter ended March 31, 2018.
The keys here were the record Q1 2018 Sales of $8,071,000, an increase of 114% compared to Q1 2017, as well as record Q1 2018 gross profit of $5,562,000, an increase of 129% compared to Q1 2017 and record Q1 2018 GAAP net income of $619,000, an improvement of $4,404,000 when compared to Q1 2017. The numbers clearly came as a welcome surprise to the market and confirmed the company’s strategic assumptions over recent quarters.
CV Sciences Inc (OTCMKTS:CVSI) frames itself as a life science company, focuses on developing and commercializing novel therapeutics utilizing synthetic Cannabidiol (CBD).
CVSI operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division in manufacturing, marketing and selling plant-based CBD products to a range of market sectors, including nutraceutical, beauty care, specialty foods, and vape.
Following the CanX Acquisition in December 2015, CV Sciences commenced its preclinical drug development program during the second quarter of 2016. The Company’s drug development efforts include pursuing synthetic-based Cannabidiol drug candidates in areas that have the potential to provide significant improvements in therapeutic patient treatments with sizable addressable markets.
The company was formerly known as CannaVEST Corp. and changed its name to CV Sciences, Inc. in January 2016. CV Sciences, Inc. has primary offices and facilities in Las Vegas, Nevada and San Diego, California.
CV Sciences Inc is led by Michael J. Mona, JR. founder of CV Sciences, Mr. Mona possesses over 30 years of senior management experience in a range of industries including real estate/construction, industrial farming, chemical processing and consumer products. Mr. Mona is a recognized industry leader in hemp farming operations and chemical extraction and has established a global supply chain of hemp-derived products.
According to company materials, “CV Sciences, Inc. (CVSI) operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division in manufacturing, marketing and selling plant-based CBD products to a range of market sectors. CV Sciences, Inc. has primary offices and facilities in Las Vegas, Nevada and San Diego, California.”
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“We are off to a strong start for 2018, delivering record financial performance on all of our key metrics including triple-digit year-over-year revenue growth and double-digit sales growth on a sequential quarterly comparison. Our operating performance is driven by a combination of core revenue growth, strong demand for our products, and a market that is still in its infancy stages,” said Joseph Dowling, CFO of CV Sciences. “In every aspect, we set new performance records and laid the groundwork for continued profitable growth. On the drug development side, we made steady progress in advancing CVSI-007 – our proprietary lead drug candidate – which addresses the multibillion-dollar smokeless tobacco use and addiction market. This quarter validates our ability to grow profitably and generate cash flow and positions us well to deliver a successful 2018 for our shareholders.”
Traders will note just under 110% added to share values of the name over the past month of action. What’s more, the name has registered increased average transaction volume recently, with the past month seeing exceeding 110% over what the stock has registered over the longer term.
Traders should note this as important with the stock trading on a float that is tiny at just 20.9 million shares. One is wise to respect the dynamic this may create — a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.
Currently trading at a market capitalization of $74.8M, CVSI has a significant war chest ($2.8M) of cash on the books, which must be weighed relative to about $726K in total current liabilities. CVSI is pulling in trailing 12-month revenues of $20.7M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 125.6%. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $CVSI stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $CVSI, either long or short, and we have not been compensated for this article.