OrganiGram OGI Stock Will See Its Day And Move Up

OrganiGram Holdings OGI Stock will eventually start a long journey higher.  Given the positioning of this cannabis company’s latest moves, revenues will begin growing.  And, if you factor in the BAT investment, there would be continuous support.  In the meantime, OrganiGram has had some challenges with rolling out a few of the key elements to their offerings.  This was acknowledged by management.  Still, I think OrganiGram OGI stock has a lot of upside potential for a long-term investor.  But, I also wonder if OrganiGram will be totally acquired by BAT?

Metrics for OrganiGram Holdings OGI stock are still uncertain.  But, this is more of a function of the fact that this is one of the cannabis companies that is still rolling out its offerings.  At the same time, legalization for Canadian cannabis happened in October 2018.  To me, this is taking some time.

But, right now OrganiGram is starting to roll out more and more offerings and getting its positioning lined up for revenue growth and expansion.

OrganiGram expectations in the near future

I expect OrganiGram Holdings OGI stock to move higher over a period of time.  But, what I do not expect is for there to be impressive numbers for a bit.  At this time, expectations are for a total of about $100M in revenue in the coming year.  The fact that we are sitting at Q3, 2021 and revenues are coming in about $15M – $20M regularly, is a small increase.  over what is printing now.  Given the current metrics, there is a lot of work to be done to get costs under control.  Nonetheless, OGI stock will get there.

Any catalyst for upward movement may take a few more quarters.  Time is money; I would be looking elsewhere.  My expectations were that OrganiGram would have begun printing better numbers a lot faster.

OrganiGram Holdings OGI Stock Metrics

I do several series of Top 10 listings, including the Complete List of Top 100 Cannabis Companies,  where I compare cannabis companies to one another.  I measure up the various metrics any one company produces.  By doing so you can see where anyone company compares to another and whether you have found one of the best marijuana stocks to buy, or whether that particular stock is below average.

Here are the middling numbers for OrganiGram to show where OGI stock compares:

  • #19 Revenue Growth Rate (Up from #79 w/negative growth rate)
  • #37 Revenue Per Share: $0.055 (300M shares outstanding)
  • #85 Gross Margins: -14%
  • #43 Total Operating Efficiencies: 75%
  • #74 EBITDA/Revenue: -48.5%
  • #27 Cash/Debt Ratio: 56.7%

As you can see, there is nothing here that stands out too significantly in a positive way.  As for revenue growth rate, this can be discounted considering that the previous quarter’s numbers were as low as they were.

Organigram Holdings Financial Data

Revenue growth rate has largely been flat. Again, however, things are going to start turning around and we should see some measured growth rates.  Then, it is a matter of seeing how receptive the market is to OrganiGram’s offerings.

Revenue

As I mentioned, revenue has been largely flat for some time:

OrganiGram Holdings Revenue
Revenue: To view OrganiGram Holdings Financial Data Visit OGI Stock Page

Like many, I am interested in seeing how the new offerings and new venues in Ontario Province will line up and add to revenue.  Plus, the BAT offerings may do well in the future and this will add to the revenue stream.

The BAT will mean that British American Tobacco will be marketing products and building a product line.  BAT will have a tremendous amount of resources available to market these products.  This could be a very big deal over a long period of time.

Gross Margins

Margins still fall short of being able to evaluate where OrganiGram OGI stock could be; they are still negative:

OrganiGram Holdings Gross Margins
Revenue: To view OrganiGram Holdings Financial Data Visit OGI Stock Page

Negative gross margins are a result of expenses and the valuation of inventory well above revenues.  But, with increased revenue, economies of scale, and rolling out more and more products gross margins will start to move in line.  There needs to be more consistency.  For now, they are negative.

Operating Costs

Operating costs are actually not a bad spot and given an increase in revenue this metric will start to line up with some of the better companies:

OrganiGram Holdings Operating Efficiencies
Revenue: To view OrganiGram Holdings Financial Data Visit OGI Stock Page

OrganiGram has done a decent job of keeping total operating costs flat for now.  But, there was an increase in operating costs as OrganiGram opens up new sales avenues.  But, you have to crack some eggs to make an omelet.

If revenues were to jump upwards to about $25M in a quarter’s time then total operating efficiencies are going to line up nicely.  So, I see this as a potential positive in a short period of time.

Net Income

Despite some of the metrics above, EBITDA profits are not too far off:

OrganiGram Holdings Net Income
Revenue: To view OrganiGram Holdings Financial Data Visit OGI Stock Page

I see this as a continuation of the current story: Profitability will take a bit of time, but it is on the horizon.

OrganiGram Holdings OGI Stock Chart Movement

Most marijuana stocks have been sliding lower and lower.  Despite that, OGI Stock has largely gone sideways:

OrganiGram OGI Stock
OrganiGram OGI Stock

There has not been much love in the cannabis industry and there really is no catalyst to drive OGI stock upwards in the very near future.  Once the full product lines are rolled out, however, this will change.

MSOS ETF Stock:

As you can see, the big US MSOS ETF has gone sideways and now is sliding lower:

MSOS ETF - MSOS AdvisorShares US Pure Cannabis ETF & OGI Stock
MSOS ETF – MSOS AdvisorShares US Pure Cannabis ETF

I see this as a mix of both some cannabis companies being over valued as well as an opportunity for others. Some of the big-named marijuana stocks are overpriced for where they are. And, some of these I see as potentially going lower.  This is a constant theme that I see.

Given that, there are significant opportunities for value investors in cannabis investing.  These moves lower for some of these better companies are very likely opportunities to buy.

OrganiGram OGI Stock and its future

I do not see any real increases in revenues or large improvements in metrics for OrganiGram OGI stock in the future.  But, OGI stock will have its day as they continue to build the business.

Building a cannabis company is not an event; it is a process.  And as the process moves forward the stock gains its potential more and more.  There will be a time when the numbers turn the corner.  Then, OGI stock will start a long move upwards as it realizes its potential.

Also, keep in mind that OGI Stock may very well get acquired wholly at some point by BAT.  That, alone, is a big potential.

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