Ayurcann AYURF Stock Forecast & Analysis

Ayurcann Holdings AYURF stock is a company with a lot of potential and, revenues are showing increases.  This is one of the cannabis stocks that could be a strong performer amongst cannabis investments.  Ayurcann Holdings has some 300,000 KG of cannabis production capacity.  At $5,000 USD per kilo, that is $1.5B potential revenue.  If they were to actually ramp up to that level, Ayurcann AYURF stock would see a massive move upward. If Ayurcann Holdings could get a reasonable 7.5% net earnings off of the $1.5B in potential revenue, that would be $112M with an EPS of nearly $1.00 per share with 121M shares outstanding.  That could potentially propel AYURF stock up to between $50.00 – $100.00 if the company could get to that level making this one of the intriguing cannabis investments and I look forward to putting together the AYURF Stock forecast in the future.

But, would Ayurcann Holdings necessarily be able to sell that much cannabis?

The potential exists, and there is growing revenues as Ayurcann Holdings continues to penetrate the market.  But, there is a lot of vape competition amongst cannabis stocks, and I do not see this as a one-way path upwards.

But, I am intrigued.

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Ayurcann Holdings Financial Data

Here is a breakdown of Ayurcann Holdings Q4 financial data.

Ayurcann Holdings Gross Profits

  • Ayurcann Holdings Revenue

Revenues are starting to trend upward and Ayurcann Holdings management believes this is the groundwork for far bigger revenues. Again, though, production capacity is for ~$1.5B potential revenue.  I think this may take a minute to get to this point.

In the meantime, gross margins are sitting at a healthy ~50%.  With economies of scale being driven by increasing sales & revenue, Ayurcann Holdings may very well see pushes upwards here.  This will potentially drive profits higher with margins likely to hit 60% by the end of this year; 2022.  This will help drive all cannabis stocks; especially AYURF stock.

Ayurcann Holdings Operating Profits

  • Ayurcann Holdings Operating Costs

Operationally, Ayurcann Holdings is already at competitive levels with operating costs.  And, if there can be a linear relationship in the coming quarters then operating efficiencies may maintain these competitive levels versus all cannabis investments.

Operating costs do not necessarily stay at the same level.  As revenues increase, Ayurcann will likely push these higher given more working capital.  Since management has already achieved a competitive level I expect they will maintain this level, if not gain even more ground.

At the same time, if revenues increase, and management feels an investment into more sales would yield even more ROI, then look for room for a push for more revenue.  This all adds up to AYURF stock heading upwards over the long term.

Ayurcann Holdings EBITDA & Net Profits

  • Ayurcann Holdings EBITDA

The EBITDA/Revenue rate is out of this world.  But, it is not necessarily trustworthy to me.  Total revenue was ~$2M.  Cost of goods was ~$1.1M.  Operating costs hit ~$.8M.  This all adds up to ~$1.9M in costs yet, Ayurcann Holdings is claiming ~$2M in EBITDA.

Hmmm… adjustments.

These adjustments are likely to be driven by previous write-downs that are now being revalued and adjustments are showing up today.  Nonetheless, even without the adjustments, Ayurcann Holdings would have hit EBITDA profitability.

This is one of the things with investing in cannabis stocks.  You have to look a little beyond the charts and bust out a calculator.  Eventually, there will be consistency and this will get easier with each of the respective cannabis stocks.

Also, there were some outlying profits that helped drive net earnings to profitability.  Because of that, we need to see just a small amount of consistency in order to gain more confidence here.

Ayurcann Holdings Cash On Hand

  • Ayurcann Holdings Cash on Hand

From the perspective of financial footing, Ayurcann Holdings appears to be well situated.  There is ample cash at this point.  And, from a comparative level, Ayurcann Holdings would be closer to the top of the pile versus the middle given its cash:debt ratio.

At the same time, total equity is increasing.

Ayurcann Holdings Total Equity

  • Ayurcann Holdings Total Assets

Assets are what drive a company’s ability to create revenue.  And, keeping debt down is what it takes to drive profits.  This is where you look when it comes to answering the question: Is management creating investor value?

Ayurcann Holdings is increasing total assets and debts have also gone up.  But, total equity is trending higher.  The recent net earnings

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Ayurcann Holdings AYURF Stock Forecast

Despite achieving EBITDA profitability this quarter, and even net earnings positive, I am going to hold off on doing the AYURF stock forecast.  I want to see more consistency from core company activity versus adjustments pushing EBITDA as well as outside core profits driving the bottom line.

Doing a Discounted Cash Flow Calculation is very likely to happen this year.

Is Ayurcann Holdings AYURF Stock A Good Investment?

 

I am very intrigued by Ayurcann Holdings as a stock investment.  There is an overwhelming potential in future revenue with the 300K kilo processing output.  That will potentially drive revenues very high.  And, since this potential already exists, scaling up will be easy on costs.

I would want to see a few more quarters of financial releases to see if there is going to be more profits via operating costs remaining contained as well as gross margins pushing higher.  Fundamentally, I think AYURF stock is a solid opportunity and there is a lot of upside potential.  Factoring in the margins already being at a levels that will push profitability, early and savvy investors in cannabis stocks would do well to get involved in AYURF stock.

Ayurcann Financial Data

AyurCann AYURF Stock Financial Data

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3 thoughts on “Ayurcann AYURF Stock Forecast & Analysis

  1. Thank you for getting to Ayurcann! I never envisioned them at $50-$100 a share but was hoping for $10 in 5 years. I like your speculative vision better. 😉 A lot of work but I only see a huge upside with this company. 

    1. In order for that price to hit they would need to do the aforementioned $1.5B in revenue. I don’t see that for a few years. But, I could easily see 10% of that, which would translate to $5.00 – $10.00. How quickly can they scale up to $150M? Might take a couple of years.

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