The big question with KushCo Holdings Inc (OTCMKTS:KSHB) is whether or not this is a value trap. The company has been posting strong data, but shares have been dropping below key support levels. This is either a major opportunity or not. To help resolve this analytic dilemma, the company just announced that it is reconfirming its annual revenue guidance for its fiscal year ended August 31, 2019, of between $145 million and $150 million in sales.
According to the release, major initiatives that the Company launched and/or accomplished during Fiscal 2019 include: The Company renamed and rebranded itself as “KushCo Holdings, Inc.” The Companys main operating company subsidiary is now Kush Supply Co., the Company opened its new corporate headquarters in Cypress, California, the Company opened its product sourcing office in Ningbo, China and a regional distribution center in Taylor, Michigan.
KushCo Holdings Inc (OTCMKTS:KSHB) is the parent company to a diverse group of business units that are transformative leaders in the cannabis, CBD and other related industries. KushCo Holdings’ subsidiaries and brands provide exceptional customer service, product quality, compliance knowledge and a local presence in serving its diverse customer base.
KushCo Holdings’ brands include Kush Bottles, a dynamic sales platform that is the nation’s largest and most respected distributor of packaging, supplies, and accessories, Kush Energy, which provides ultra-pure hydrocarbon gases and solvents to the cannabis and CBD sector, Hybrid Creative, a premier creative design agency for cannabis and non-cannabis ventures, and Koleto Packaging Solutions, the research and development arm driving intellectual property development and acquisitions.
Founded in 2010, KushCo Holdings has now sold more than 1 billion units and regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe. KushCo Holdings subsidiaries maintain facilities in the five largest U.S. cannabis markets as well as having a local sales presence in every major U.S. cannabis market.
According to its materials, “KushCo Holdings, strives to be the industry leader for responsible and compliant products and services in the legal cannabis and CBD industry. The Company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, Entrepreneur, and business magazine Inc. While KushCo Holdings services all facets of the cannabis and CBD industries, it has no direct involvement with the cannabis plant or any products that contain THC or CBD.”
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As noted above, KSHB just announced that it is reconfirming its annual revenue guidance for its fiscal year ended August 31, 2019, of between $145 million and $150 million in sales.
Even in light of this news, KSHB has had a rough past week of trading action, with shares sinking something like -8% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -13%.
Nick Kovacevich, CEO and Chairman of KushCo Holdings, noted, In addition to achieving these highly transformational initiatives and significant milestones, we are most proud of the way we have been able to grow the business and position ourselves for long-term sustainable success. Our revenue growth for the year remained strong.
Currently trading at a market capitalization of $330M, KSHB has a significant war chest ($12.2M) of cash on the books, which must be weighed relative to about $29.8M in total current liabilities. One should also note that debt has been growing over recent quarters. KSHB is pulling in trailing 12-month revenues of $121.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 221.5%. We will update the story again as soon as developments transpire. Sign-up for continuing coverage on shares of $KSHB 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 $KSHB, either long or short, and we have not been compensated for this article.