The chart pattern for CV Sciences Inc (OTCMKTS:CVSI) continues to build out its longstanding lateral consolidation with the potential for an eventual resumption of the dramatic upward trend we have seen over recent years. That potential was further bolstered last week as the company just announced strong financial results for the quarter ended March 31. All of this comes in the context of a key test of the 200-day moving average which has defined much of the action in this stock over recent years.
According to the release, the company posted a record $14.9 million in revenues for the first quarter of 2019, representing an increase of 85% over the same quarter in 2018; strong gross margins of 70.8% compared to 68.9% in the first quarter of 2018; a retail distribution increase of 48% on a sequential quarterly basis to 3,308 stores; an expanded retail presence into the food, drug, and mass channel marketplaces with active discussions for further expansion of the PlusCBD Oil brand currently underway; and $800k in cash from operations, increasing the company’s cash balance to $13.6 million by quarter end.
CV Sciences Inc (OTCMKTS:CVSI) bills 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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As noted above, CVSI just announced strong financial results for the quarter ended March 31, 2019.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CVSI shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -2% on above-average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
In addition, the company has seen interest climb, with an increase in recent trading volume of 8% beyond its prior sustained average level.
“We continued to expand retail distribution of the PlusCBD Oil brand and drive sales growth during the first quarter. We generated 85% revenue growth over prior year, achieving another record quarter, with strong gross margin performance,” stated Joseph Dowling, Chief Executive Officer of CV Sciences.
At this time, carrying a capital value in the market of $488.97M, CVSI has a significant war chest ($12.9M) of cash on the books, which is balanced by about $4.4M in total current liabilities. One should also note that debt has been growing over recent quarters. CVSI is pulling in trailing 12-month revenues of $48.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 96.4%. 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.